{"id":5333,"date":"2020-04-02T03:22:11","date_gmt":"2020-04-02T03:22:11","guid":{"rendered":"https:\/\/www.dumpsbase.com\/freedumps\/?p=5333"},"modified":"2020-04-02T03:22:28","modified_gmt":"2020-04-02T03:22:28","slug":"global-association-of-risk-professionals-garp-icbrr-exam-dumps","status":"publish","type":"post","link":"https:\/\/www.dumpsbase.com\/freedumps\/global-association-of-risk-professionals-garp-icbrr-exam-dumps.html","title":{"rendered":"Global Association of Risk Professionals (GARP) ICBRR Exam Dumps"},"content":{"rendered":"<p>The International Certificate in Banking Risk and Regulation ICBRR is a global certificate program that delivers a deep qualitative understanding of the risks associated with banking and the financial markets. Come to get ICBRR exam dumps to prepare for your International Certificate in Banking Risk and Regulation certification exam. You can read ICBRR exam dumps questions to prepare for your exam well.<\/p>\n<h2><span style=\"color: #800000;\">ICBRR Free Dumps<\/span> Also Released To Help You Check The High-Quality<\/h2>\n<script>\n  window.fbAsyncInit = function() {\n    FB.init({\n      appId            : '622169541470367',\n      autoLogAppEvents : true,\n      xfbml            : true,\n      version          : 'v3.1'\n    });\n  };\n\n  (function(d, s, id){\n     var js, fjs = d.getElementsByTagName(s)[0];\n     if (d.getElementById(id)) {return;}\n     js = d.createElement(s); js.id = id;\n     js.src = \"https:\/\/connect.facebook.net\/en_US\/sdk.js\";\n     fjs.parentNode.insertBefore(js, fjs);\n   }(document, 'script', 'facebook-jssdk'));\n<\/script><div id=\"watu_quiz\" class=\"quiz-area single-page-quiz\">\n<p><\/p><form action=\"\" method=\"post\" class=\"quiz-form \" id=\"quiz-2045\" >\n<div class='watu-question' id='question-1'><div class='question-content'><p><span class='watu_num'>1. <\/span>Which one of the following four statements correctly defines credit risk?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116879' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481704' \/><div class='watu-question-choice'><input type='radio' name='answer-116879[]' id='answer-id-481704' class='answer answer-1  answerof-116879' value='481704' \/>&nbsp;<label for='answer-id-481704' id='answer-label-481704' class=' answer label-1'><span class='answer'>Credit risk is the risk that complements market and liquidity risks.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481705' \/><div class='watu-question-choice'><input type='radio' name='answer-116879[]' id='answer-id-481705' class='answer answer-1  answerof-116879' value='481705' \/>&nbsp;<label for='answer-id-481705' id='answer-label-481705' class=' answer label-1'><span class='answer'>Credit risk is a form of performance risk in contractual relationship.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481706' \/><div class='watu-question-choice'><input type='radio' name='answer-116879[]' id='answer-id-481706' class='answer answer-1  answerof-116879' value='481706' \/>&nbsp;<label for='answer-id-481706' id='answer-label-481706' class=' answer label-1'><span class='answer'>Credit risk is the risk arising from execution of a company&#8217;s strategy.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481707' \/><div class='watu-question-choice'><input type='radio' name='answer-116879[]' id='answer-id-481707' class='answer answer-1  answerof-116879' value='481707' \/>&nbsp;<label for='answer-id-481707' id='answer-label-481707' class=' answer label-1'><span class='answer'>Credit risk is the risk that summarizes the exposures a company or firm assumes when it attempts to operate within a given field or industry.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType1' value='radio' class=''><\/div><div class='watu-question' id='question-2'><div class='question-content'><p><span class='watu_num'>2. <\/span>A credit analyst wants to determine a good pricing strategy to compensate for credit decisions that might have been made incorrectly. When analyzing her credit portfolio, the analyst focuses on the spreads in each loan to determine if they are sufficient to compensate the bank for all of the following costs and risks EXCEPT.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116880' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481708' \/><div class='watu-question-choice'><input type='radio' name='answer-116880[]' id='answer-id-481708' class='answer answer-2  answerof-116880' value='481708' \/>&nbsp;<label for='answer-id-481708' id='answer-label-481708' class=' answer label-2'><span class='answer'>The marginal cost of funds provided.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481709' \/><div class='watu-question-choice'><input type='radio' name='answer-116880[]' id='answer-id-481709' class='answer answer-2  answerof-116880' value='481709' \/>&nbsp;<label for='answer-id-481709' id='answer-label-481709' class=' answer label-2'><span class='answer'>The overhead cost of maintaining the loan and the account.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481710' \/><div class='watu-question-choice'><input type='radio' name='answer-116880[]' id='answer-id-481710' class='answer answer-2  answerof-116880' value='481710' \/>&nbsp;<label for='answer-id-481710' id='answer-label-481710' class=' answer label-2'><span class='answer'>The inherent risk of lending to this borrower while providing a return on the risk capital used to the support the loan.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481711' \/><div class='watu-question-choice'><input type='radio' name='answer-116880[]' id='answer-id-481711' class='answer answer-2  answerof-116880' value='481711' \/>&nbsp;<label for='answer-id-481711' id='answer-label-481711' class=' answer label-2'><span class='answer'>The opportunity cost of risk-adjusted marginal cost of capital.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType2' value='radio' class=''><\/div><div class='watu-question' id='question-3'><div class='question-content'><p><span class='watu_num'>3. <\/span>To estimate the interest charges on the loan, an analyst should use one of the following four formulas:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116881' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481712' \/><div class='watu-question-choice'><input type='radio' name='answer-116881[]' id='answer-id-481712' class='answer answer-3  answerof-116881' value='481712' \/>&nbsp;<label for='answer-id-481712' id='answer-label-481712' class=' answer label-3'><span class='answer'>Loan interest = Risk-free rate &#8211; Probability of default x Loss given default + Spread<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481713' \/><div class='watu-question-choice'><input type='radio' name='answer-116881[]' id='answer-id-481713' class='answer answer-3  answerof-116881' value='481713' \/>&nbsp;<label for='answer-id-481713' id='answer-label-481713' class=' answer label-3'><span class='answer'>Loan interest = Risk-free rate + Probability of default x Loss given default + Spread<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481714' \/><div class='watu-question-choice'><input type='radio' name='answer-116881[]' id='answer-id-481714' class='answer answer-3  answerof-116881' value='481714' \/>&nbsp;<label for='answer-id-481714' id='answer-label-481714' class=' answer label-3'><span class='answer'>Loan interest = Risk-free rate &#8211; Probability of default x Loss given default &#8211; Spread<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481715' \/><div class='watu-question-choice'><input type='radio' name='answer-116881[]' id='answer-id-481715' class='answer answer-3  answerof-116881' value='481715' \/>&nbsp;<label for='answer-id-481715' id='answer-label-481715' class=' answer label-3'><span class='answer'>Loan interest = Risk-free rate + Probability of default x Loss given default &#8211; Spread<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType3' value='radio' class=''><\/div><div class='watu-question' id='question-4'><div class='question-content'><p><span class='watu_num'>4. <\/span>Alpha Bank determined that Delta Industrial Machinery Corporation has 2% change of default on a one-year no-payment of USD $1 million, including interest and principal repayment. The bank charges 3% interest rate spread to firms in the machinery industry, and the risk-free interest rate is 6%. Alpha Bank receives both interest and principal payments once at the end the year. Delta can only default at the end of the year. If Delta defaults, the bank expects to lose 50% of its promised payment. Hence, the loss rate in this case will be<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116882' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481716' \/><div class='watu-question-choice'><input type='radio' name='answer-116882[]' id='answer-id-481716' class='answer answer-4  answerof-116882' value='481716' \/>&nbsp;<label for='answer-id-481716' id='answer-label-481716' class=' answer label-4'><span class='answer'>1%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481717' \/><div class='watu-question-choice'><input type='radio' name='answer-116882[]' id='answer-id-481717' class='answer answer-4  answerof-116882' value='481717' \/>&nbsp;<label for='answer-id-481717' id='answer-label-481717' class=' answer label-4'><span class='answer'>3%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481718' \/><div class='watu-question-choice'><input type='radio' name='answer-116882[]' id='answer-id-481718' class='answer answer-4  answerof-116882' value='481718' \/>&nbsp;<label for='answer-id-481718' id='answer-label-481718' class=' answer label-4'><span class='answer'>5%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481719' \/><div class='watu-question-choice'><input type='radio' name='answer-116882[]' id='answer-id-481719' class='answer answer-4  answerof-116882' value='481719' \/>&nbsp;<label for='answer-id-481719' id='answer-label-481719' class=' answer label-4'><span class='answer'>10%<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType4' value='radio' class=''><\/div><div class='watu-question' id='question-5'><div class='question-content'><p><span class='watu_num'>5. <\/span>Alpha Bank determined that Delta Industrial Machinery Corporation has 2% change of default on a one-year no-payment of USD $1 million, including interest and principal repayment. The bank charges 3% interest rate spread to firms in the machinery industry, and the risk-free interest rate is 6%. Alpha Bank receives both interest and principal payments once at the end the year. Delta can only default at the end of the year. If Delta defaults, the bank expects to lose 50% of its promised payment.<br \/>\n<br \/>What interest rate should Alpha Bank charge on the no-payment loan to Delta Industrial Machinery Corporation?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116883' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481720' \/><div class='watu-question-choice'><input type='radio' name='answer-116883[]' id='answer-id-481720' class='answer answer-5  answerof-116883' value='481720' \/>&nbsp;<label for='answer-id-481720' id='answer-label-481720' class=' answer label-5'><span class='answer'>8%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481721' \/><div class='watu-question-choice'><input type='radio' name='answer-116883[]' id='answer-id-481721' class='answer answer-5  answerof-116883' value='481721' \/>&nbsp;<label for='answer-id-481721' id='answer-label-481721' class=' answer label-5'><span class='answer'>9%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481722' \/><div class='watu-question-choice'><input type='radio' name='answer-116883[]' id='answer-id-481722' class='answer answer-5  answerof-116883' value='481722' \/>&nbsp;<label for='answer-id-481722' id='answer-label-481722' class=' answer label-5'><span class='answer'>10%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481723' \/><div class='watu-question-choice'><input type='radio' name='answer-116883[]' id='answer-id-481723' class='answer answer-5  answerof-116883' value='481723' \/>&nbsp;<label for='answer-id-481723' id='answer-label-481723' class=' answer label-5'><span class='answer'>12%<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType5' value='radio' class=''><\/div><div class='watu-question' id='question-6'><div class='question-content'><p><span class='watu_num'>6. <\/span>Alpha Bank determined that Delta Industrial Machinery Corporation has 2% change of default on a one-year no-payment of USD $1 million, including interest and principal repayment. The bank charges 3% interest rate spread to firms in the machinery industry, and the risk-free interest rate is 6%. Alpha Bank receives both interest and principal payments once at the end the year. Delta can only default at the end of the year. If Delta defaults, the bank expects to lose 50% of its promised payment.<br \/>\n<br \/>What may happen to the Delta&#8217;s initial credit parameter and the value of its loan if the machinery industry experiences adverse structural changes?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116884' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481724' \/><div class='watu-question-choice'><input type='radio' name='answer-116884[]' id='answer-id-481724' class='answer answer-6  answerof-116884' value='481724' \/>&nbsp;<label for='answer-id-481724' id='answer-label-481724' class=' answer label-6'><span class='answer'>Probability of default and loss at default may decrease simultaneously, while duration rises causing the loan value to decrease.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481725' \/><div class='watu-question-choice'><input type='radio' name='answer-116884[]' id='answer-id-481725' class='answer answer-6  answerof-116884' value='481725' \/>&nbsp;<label for='answer-id-481725' id='answer-label-481725' class=' answer label-6'><span class='answer'>Probability of default and loss at default may decrease simultaneously, while duration falls causing the loan value to decrease.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481726' \/><div class='watu-question-choice'><input type='radio' name='answer-116884[]' id='answer-id-481726' class='answer answer-6  answerof-116884' value='481726' \/>&nbsp;<label for='answer-id-481726' id='answer-label-481726' class=' answer label-6'><span class='answer'>Probability of default and loss at default may increase simultaneously, while duration rises causing the loan value to decrease.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481727' \/><div class='watu-question-choice'><input type='radio' name='answer-116884[]' id='answer-id-481727' class='answer answer-6  answerof-116884' value='481727' \/>&nbsp;<label for='answer-id-481727' id='answer-label-481727' class=' answer label-6'><span class='answer'>Probability of default and loss at default may increase simultaneously, while duration falls causing the loan value to decrease.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType6' value='radio' class=''><\/div><div class='watu-question' id='question-7'><div class='question-content'><p><span class='watu_num'>7. <\/span>Alpha Bank determined that Delta Industrial Machinery Corporation has 2% change of default on a one-year no-payment of USD $1 million, including interest and principal repayment. The bank charges 3% interest rate spread to firms in the machinery industry, and the risk-free interest rate is 6%. Alpha Bank receives both interest and principal payments once at the end the year. Delta can only default at the end of the year. If Delta defaults, the bank expects to lose 50% of its promised payment. Six months after Alpha Bank provides USD $1 million loan to the Delta Industrial Machinery Corporation, a new competitor enters the machinery industry, causing Delta to adjust its prices and mark down the value of its inventory. Hence, the probability of default increases from 2% to 10% and the loss given default increases from 50% to 75%.<br \/>\n<br \/>If Alpha Bank can reprice the loan, what should the new rate be?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116885' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481728' \/><div class='watu-question-choice'><input type='radio' name='answer-116885[]' id='answer-id-481728' class='answer answer-7  answerof-116885' value='481728' \/>&nbsp;<label for='answer-id-481728' id='answer-label-481728' class=' answer label-7'><span class='answer'>10%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481729' \/><div class='watu-question-choice'><input type='radio' name='answer-116885[]' id='answer-id-481729' class='answer answer-7  answerof-116885' value='481729' \/>&nbsp;<label for='answer-id-481729' id='answer-label-481729' class=' answer label-7'><span class='answer'>13%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481730' \/><div class='watu-question-choice'><input type='radio' name='answer-116885[]' id='answer-id-481730' class='answer answer-7  answerof-116885' value='481730' \/>&nbsp;<label for='answer-id-481730' id='answer-label-481730' class=' answer label-7'><span class='answer'>16.5%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481731' \/><div class='watu-question-choice'><input type='radio' name='answer-116885[]' id='answer-id-481731' class='answer answer-7  answerof-116885' value='481731' \/>&nbsp;<label for='answer-id-481731' id='answer-label-481731' class=' answer label-7'><span class='answer'>20.5%<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType7' value='radio' class=''><\/div><div class='watu-question' id='question-8'><div class='question-content'><p><span class='watu_num'>8. <\/span>Which one of the following four model types would assign an obligor to an obligor class based on the risk characteristics of the borrower at the time the loan was originated and estimate the default probability based on the past default rate of the members of that particular class?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116886' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481732' \/><div class='watu-question-choice'><input type='radio' name='answer-116886[]' id='answer-id-481732' class='answer answer-8  answerof-116886' value='481732' \/>&nbsp;<label for='answer-id-481732' id='answer-label-481732' class=' answer label-8'><span class='answer'>Dynamic models<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481733' \/><div class='watu-question-choice'><input type='radio' name='answer-116886[]' id='answer-id-481733' class='answer answer-8  answerof-116886' value='481733' \/>&nbsp;<label for='answer-id-481733' id='answer-label-481733' class=' answer label-8'><span class='answer'>Causal models<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481734' \/><div class='watu-question-choice'><input type='radio' name='answer-116886[]' id='answer-id-481734' class='answer answer-8  answerof-116886' value='481734' \/>&nbsp;<label for='answer-id-481734' id='answer-label-481734' class=' answer label-8'><span class='answer'>Historical frequency models<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481735' \/><div class='watu-question-choice'><input type='radio' name='answer-116886[]' id='answer-id-481735' class='answer answer-8  answerof-116886' value='481735' \/>&nbsp;<label for='answer-id-481735' id='answer-label-481735' class=' answer label-8'><span class='answer'>Credit rating models<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType8' value='radio' class=''><\/div><div class='watu-question' id='question-9'><div class='question-content'><p><span class='watu_num'>9. <\/span>Which one of the following four models is typically used to grade the obligations of small- and medium-size enterprises?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116887' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481736' \/><div class='watu-question-choice'><input type='radio' name='answer-116887[]' id='answer-id-481736' class='answer answer-9  answerof-116887' value='481736' \/>&nbsp;<label for='answer-id-481736' id='answer-label-481736' class=' answer label-9'><span class='answer'>Causal models<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481737' \/><div class='watu-question-choice'><input type='radio' name='answer-116887[]' id='answer-id-481737' class='answer answer-9  answerof-116887' value='481737' \/>&nbsp;<label for='answer-id-481737' id='answer-label-481737' class=' answer label-9'><span class='answer'>Historical frequency models<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481738' \/><div class='watu-question-choice'><input type='radio' name='answer-116887[]' id='answer-id-481738' class='answer answer-9  answerof-116887' value='481738' \/>&nbsp;<label for='answer-id-481738' id='answer-label-481738' class=' answer label-9'><span class='answer'>Credit scoring models<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481739' \/><div class='watu-question-choice'><input type='radio' name='answer-116887[]' id='answer-id-481739' class='answer answer-9  answerof-116887' value='481739' \/>&nbsp;<label for='answer-id-481739' id='answer-label-481739' class=' answer label-9'><span class='answer'>Credit rating models<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType9' value='radio' class=''><\/div><div class='watu-question' id='question-10'><div class='question-content'><p><span class='watu_num'>10. <\/span>A credit associate extending a loan to an obligor suspects that the obligor may change his behavior after the loan has been originated. The obligor in this case may use the loan proceeds for purposes not sanctioned by the lender, thereby increasing the risk of default.<br \/>\n<br \/>Hence, the credit associate must estimate the probability of default based on the assumptions about the applicability of the following tendency to this lending situation:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116888' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481740' \/><div class='watu-question-choice'><input type='radio' name='answer-116888[]' id='answer-id-481740' class='answer answer-10  answerof-116888' value='481740' \/>&nbsp;<label for='answer-id-481740' id='answer-label-481740' class=' answer label-10'><span class='answer'>Speculation<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481741' \/><div class='watu-question-choice'><input type='radio' name='answer-116888[]' id='answer-id-481741' class='answer answer-10  answerof-116888' value='481741' \/>&nbsp;<label for='answer-id-481741' id='answer-label-481741' class=' answer label-10'><span class='answer'>Short bias<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481742' \/><div class='watu-question-choice'><input type='radio' name='answer-116888[]' id='answer-id-481742' class='answer answer-10  answerof-116888' value='481742' \/>&nbsp;<label for='answer-id-481742' id='answer-label-481742' class=' answer label-10'><span class='answer'>Moral hazard<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481743' \/><div class='watu-question-choice'><input type='radio' name='answer-116888[]' id='answer-id-481743' class='answer answer-10  answerof-116888' value='481743' \/>&nbsp;<label for='answer-id-481743' id='answer-label-481743' class=' answer label-10'><span class='answer'>Adverse selection<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType10' value='radio' class=''><\/div><div class='watu-question' id='question-11'><div class='question-content'><p><span class='watu_num'>11. <\/span>A bank customer chooses a mortgage with low initial payments and payments that increase over time because the customer knows that she will have trouble making payments in the early years of the loan.<br \/>\n<br \/>The bank makes this type of mortgage with the same default assumptions uses for ordinary mortgages, thus underestimating the risk of default and becoming exposed to:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116889' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481744' \/><div class='watu-question-choice'><input type='radio' name='answer-116889[]' id='answer-id-481744' class='answer answer-11  answerof-116889' value='481744' \/>&nbsp;<label for='answer-id-481744' id='answer-label-481744' class=' answer label-11'><span class='answer'>Moral hazard<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481745' \/><div class='watu-question-choice'><input type='radio' name='answer-116889[]' id='answer-id-481745' class='answer answer-11  answerof-116889' value='481745' \/>&nbsp;<label for='answer-id-481745' id='answer-label-481745' class=' answer label-11'><span class='answer'>Adverse selection<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481746' \/><div class='watu-question-choice'><input type='radio' name='answer-116889[]' id='answer-id-481746' class='answer answer-11  answerof-116889' value='481746' \/>&nbsp;<label for='answer-id-481746' id='answer-label-481746' class=' answer label-11'><span class='answer'>Banking speculation<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481747' \/><div class='watu-question-choice'><input type='radio' name='answer-116889[]' id='answer-id-481747' class='answer answer-11  answerof-116889' value='481747' \/>&nbsp;<label for='answer-id-481747' id='answer-label-481747' class=' answer label-11'><span class='answer'>Sampling bias<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType11' value='radio' class=''><\/div><div class='watu-question' id='question-12'><div class='question-content'><p><span class='watu_num'>12. <\/span>The potential failure of a manufacturer to honor a warranty might be called ____, whereas the potential failure of a borrower to fulfill its payment requirements, which include both the repayment of the amount borrowed, the principal and the contractual interest payments, would be called ___.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116890' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481748' \/><div class='watu-question-choice'><input type='radio' name='answer-116890[]' id='answer-id-481748' class='answer answer-12  answerof-116890' value='481748' \/>&nbsp;<label for='answer-id-481748' id='answer-label-481748' class=' answer label-12'><span class='answer'>Credit risk; market risk<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481749' \/><div class='watu-question-choice'><input type='radio' name='answer-116890[]' id='answer-id-481749' class='answer answer-12  answerof-116890' value='481749' \/>&nbsp;<label for='answer-id-481749' id='answer-label-481749' class=' answer label-12'><span class='answer'>Market risk; credit risk<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481750' \/><div class='watu-question-choice'><input type='radio' name='answer-116890[]' id='answer-id-481750' class='answer answer-12  answerof-116890' value='481750' \/>&nbsp;<label for='answer-id-481750' id='answer-label-481750' class=' answer label-12'><span class='answer'>Credit risk; performance risk<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481751' \/><div class='watu-question-choice'><input type='radio' name='answer-116890[]' id='answer-id-481751' class='answer answer-12  answerof-116890' value='481751' \/>&nbsp;<label for='answer-id-481751' id='answer-label-481751' class=' answer label-12'><span class='answer'>Performance risk; credit risk<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType12' value='radio' class=''><\/div><div class='watu-question' id='question-13'><div class='question-content'><p><span class='watu_num'>13. <\/span>Which one of the following four options does NOT represent a benefit of compensating balances to the bank?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116891' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481752' \/><div class='watu-question-choice'><input type='radio' name='answer-116891[]' id='answer-id-481752' class='answer answer-13  answerof-116891' value='481752' \/>&nbsp;<label for='answer-id-481752' id='answer-label-481752' class=' answer label-13'><span class='answer'>Compensating balances allow the bank to net some of the exposure they may have in case of default, by taking funds from these specific deposit account one the borrower defaults.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481753' \/><div class='watu-question-choice'><input type='radio' name='answer-116891[]' id='answer-id-481753' class='answer answer-13  answerof-116891' value='481753' \/>&nbsp;<label for='answer-id-481753' id='answer-label-481753' class=' answer label-13'><span class='answer'>Since the compensating balances cannot be withdrawn at short notice, if at all, they are not considered transaction accounts and are able to provide a stable funding to the bank, reducing its reliance on more volatile external inter-bank based funding sources.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481754' \/><div class='watu-question-choice'><input type='radio' name='answer-116891[]' id='answer-id-481754' class='answer answer-13  answerof-116891' value='481754' \/>&nbsp;<label for='answer-id-481754' id='answer-label-481754' class=' answer label-13'><span class='answer'>Compensation balances influence the expected loss rate of the bank given the default obligor and improve capital structure by controlling obligor type and avoiding payment delays.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481755' \/><div class='watu-question-choice'><input type='radio' name='answer-116891[]' id='answer-id-481755' class='answer answer-13  answerof-116891' value='481755' \/>&nbsp;<label for='answer-id-481755' id='answer-label-481755' class=' answer label-13'><span class='answer'>Since the compensating balances reduce the next amount lent to the borrower, the earned return on the loan is increased, further widening the bank&#8217;s interest rate margin and profitability.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType13' value='radio' class=''><\/div><div class='watu-question' id='question-14'><div class='question-content'><p><span class='watu_num'>14. <\/span>According to a Moody&#8217;s study, the most important drivers of the loss given default historically have been all of the following EXCEPT:<br \/>\n<br \/>I. Debt type and seniority<br \/>\n<br \/>II. Macroeconomic environment<br \/>\n<br \/>III. Obligor asset type<br \/>\n<br \/>IV. Recourse<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116892' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481756' \/><div class='watu-question-choice'><input type='radio' name='answer-116892[]' id='answer-id-481756' class='answer answer-14  answerof-116892' value='481756' \/>&nbsp;<label for='answer-id-481756' id='answer-label-481756' class=' answer label-14'><span class='answer'>I<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481757' \/><div class='watu-question-choice'><input type='radio' name='answer-116892[]' id='answer-id-481757' class='answer answer-14  answerof-116892' value='481757' \/>&nbsp;<label for='answer-id-481757' id='answer-label-481757' class=' answer label-14'><span class='answer'>II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481758' \/><div class='watu-question-choice'><input type='radio' name='answer-116892[]' id='answer-id-481758' class='answer answer-14  answerof-116892' value='481758' \/>&nbsp;<label for='answer-id-481758' id='answer-label-481758' class=' answer label-14'><span class='answer'>I, II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481759' \/><div class='watu-question-choice'><input type='radio' name='answer-116892[]' id='answer-id-481759' class='answer answer-14  answerof-116892' value='481759' \/>&nbsp;<label for='answer-id-481759' id='answer-label-481759' class=' answer label-14'><span class='answer'>III, IV<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType14' value='radio' class=''><\/div><div class='watu-question' id='question-15'><div class='question-content'><p><span class='watu_num'>15. <\/span>A credit rating analyst wants to determine the expected duration of the default time for a new three-year loan, which has a 2% likelihood of defaulting in the first year, a 3% likelihood of defaulting in the second year, and a 5% likelihood of defaulting the third year.<br \/>\n<br \/>What is the expected duration for this three-year loan?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116893' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481760' \/><div class='watu-question-choice'><input type='radio' name='answer-116893[]' id='answer-id-481760' class='answer answer-15  answerof-116893' value='481760' \/>&nbsp;<label for='answer-id-481760' id='answer-label-481760' class=' answer label-15'><span class='answer'>1.5 years<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481761' \/><div class='watu-question-choice'><input type='radio' name='answer-116893[]' id='answer-id-481761' class='answer answer-15  answerof-116893' value='481761' \/>&nbsp;<label for='answer-id-481761' id='answer-label-481761' class=' answer label-15'><span class='answer'>2.1 years<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481762' \/><div class='watu-question-choice'><input type='radio' name='answer-116893[]' id='answer-id-481762' class='answer answer-15  answerof-116893' value='481762' \/>&nbsp;<label for='answer-id-481762' id='answer-label-481762' class=' answer label-15'><span class='answer'>2.3 years<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481763' \/><div class='watu-question-choice'><input type='radio' name='answer-116893[]' id='answer-id-481763' class='answer answer-15  answerof-116893' value='481763' \/>&nbsp;<label for='answer-id-481763' id='answer-label-481763' class=' answer label-15'><span class='answer'>3.7 years<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType15' value='radio' class=''><\/div><div class='watu-question' id='question-16'><div class='question-content'><p><span class='watu_num'>16. <\/span>Of all the risk factors in loan pricing, which one of the following four choices is likely to be the least significant?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116894' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481764' \/><div class='watu-question-choice'><input type='radio' name='answer-116894[]' id='answer-id-481764' class='answer answer-16  answerof-116894' value='481764' \/>&nbsp;<label for='answer-id-481764' id='answer-label-481764' class=' answer label-16'><span class='answer'>Probability of default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481765' \/><div class='watu-question-choice'><input type='radio' name='answer-116894[]' id='answer-id-481765' class='answer answer-16  answerof-116894' value='481765' \/>&nbsp;<label for='answer-id-481765' id='answer-label-481765' class=' answer label-16'><span class='answer'>Duration of default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481766' \/><div class='watu-question-choice'><input type='radio' name='answer-116894[]' id='answer-id-481766' class='answer answer-16  answerof-116894' value='481766' \/>&nbsp;<label for='answer-id-481766' id='answer-label-481766' class=' answer label-16'><span class='answer'>Loss given default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481767' \/><div class='watu-question-choice'><input type='radio' name='answer-116894[]' id='answer-id-481767' class='answer answer-16  answerof-116894' value='481767' \/>&nbsp;<label for='answer-id-481767' id='answer-label-481767' class=' answer label-16'><span class='answer'>Exposure at default<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType16' value='radio' class=''><\/div><div class='watu-question' id='question-17'><div class='question-content'><p><span class='watu_num'>17. <\/span>By lowering the spread on lower credit quality borrowers, the bank will typically achieve all of the following outcomes EXCEPT:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116895' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481768' \/><div class='watu-question-choice'><input type='radio' name='answer-116895[]' id='answer-id-481768' class='answer answer-17  answerof-116895' value='481768' \/>&nbsp;<label for='answer-id-481768' id='answer-label-481768' class=' answer label-17'><span class='answer'>Aggressively courting of new business<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481769' \/><div class='watu-question-choice'><input type='radio' name='answer-116895[]' id='answer-id-481769' class='answer answer-17  answerof-116895' value='481769' \/>&nbsp;<label for='answer-id-481769' id='answer-label-481769' class=' answer label-17'><span class='answer'>Lower probability of default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481770' \/><div class='watu-question-choice'><input type='radio' name='answer-116895[]' id='answer-id-481770' class='answer answer-17  answerof-116895' value='481770' \/>&nbsp;<label for='answer-id-481770' id='answer-label-481770' class=' answer label-17'><span class='answer'>Rapid growth<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481771' \/><div class='watu-question-choice'><input type='radio' name='answer-116895[]' id='answer-id-481771' class='answer answer-17  answerof-116895' value='481771' \/>&nbsp;<label for='answer-id-481771' id='answer-label-481771' class=' answer label-17'><span class='answer'>Higher losses in case of default<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType17' value='radio' class=''><\/div><div class='watu-question' id='question-18'><div class='question-content'><p><span class='watu_num'>18. <\/span>In the United States, which one of the following four options represents the largest component of securitized debt?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116896' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481772' \/><div class='watu-question-choice'><input type='radio' name='answer-116896[]' id='answer-id-481772' class='answer answer-18  answerof-116896' value='481772' \/>&nbsp;<label for='answer-id-481772' id='answer-label-481772' class=' answer label-18'><span class='answer'>Education loans<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481773' \/><div class='watu-question-choice'><input type='radio' name='answer-116896[]' id='answer-id-481773' class='answer answer-18  answerof-116896' value='481773' \/>&nbsp;<label for='answer-id-481773' id='answer-label-481773' class=' answer label-18'><span class='answer'>Credit card loans<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481774' \/><div class='watu-question-choice'><input type='radio' name='answer-116896[]' id='answer-id-481774' class='answer answer-18  answerof-116896' value='481774' \/>&nbsp;<label for='answer-id-481774' id='answer-label-481774' class=' answer label-18'><span class='answer'>Real estate loans<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481775' \/><div class='watu-question-choice'><input type='radio' name='answer-116896[]' id='answer-id-481775' class='answer answer-18  answerof-116896' value='481775' \/>&nbsp;<label for='answer-id-481775' id='answer-label-481775' class=' answer label-18'><span class='answer'>Lines of credit<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType18' value='radio' class=''><\/div><div class='watu-question' id='question-19'><div class='question-content'><p><span class='watu_num'>19. <\/span>From the bank&#8217;s point of view, repricing the retail debt portfolio will introduce risks of fluctuations in:<br \/>\n<br \/>I. Duration<br \/>\n<br \/>II. Loss given default<br \/>\n<br \/>III. Interest rates<br \/>\n<br \/>IV. Bank spreads<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116897' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481776' \/><div class='watu-question-choice'><input type='radio' name='answer-116897[]' id='answer-id-481776' class='answer answer-19  answerof-116897' value='481776' \/>&nbsp;<label for='answer-id-481776' id='answer-label-481776' class=' answer label-19'><span class='answer'>I<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481777' \/><div class='watu-question-choice'><input type='radio' name='answer-116897[]' id='answer-id-481777' class='answer answer-19  answerof-116897' value='481777' \/>&nbsp;<label for='answer-id-481777' id='answer-label-481777' class=' answer label-19'><span class='answer'>II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481778' \/><div class='watu-question-choice'><input type='radio' name='answer-116897[]' id='answer-id-481778' class='answer answer-19  answerof-116897' value='481778' \/>&nbsp;<label for='answer-id-481778' id='answer-label-481778' class=' answer label-19'><span class='answer'>I, II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481779' \/><div class='watu-question-choice'><input type='radio' name='answer-116897[]' id='answer-id-481779' class='answer answer-19  answerof-116897' value='481779' \/>&nbsp;<label for='answer-id-481779' id='answer-label-481779' class=' answer label-19'><span class='answer'>III, IV<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType19' value='radio' class=''><\/div><div class='watu-question' id='question-20'><div class='question-content'><p><span class='watu_num'>20. <\/span>Altman&#8217;s Z-score incorporates all the following variables that are predictive of bankruptcy EXCEPT:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116898' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481780' \/><div class='watu-question-choice'><input type='radio' name='answer-116898[]' id='answer-id-481780' class='answer answer-20  answerof-116898' value='481780' \/>&nbsp;<label for='answer-id-481780' id='answer-label-481780' class=' answer label-20'><span class='answer'>Return on total assets<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481781' \/><div class='watu-question-choice'><input type='radio' name='answer-116898[]' id='answer-id-481781' class='answer answer-20  answerof-116898' value='481781' \/>&nbsp;<label for='answer-id-481781' id='answer-label-481781' class=' answer label-20'><span class='answer'>Sales to total assets<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481782' \/><div class='watu-question-choice'><input type='radio' name='answer-116898[]' id='answer-id-481782' class='answer answer-20  answerof-116898' value='481782' \/>&nbsp;<label for='answer-id-481782' id='answer-label-481782' class=' answer label-20'><span class='answer'>Equity to debt<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481783' \/><div class='watu-question-choice'><input type='radio' name='answer-116898[]' id='answer-id-481783' class='answer answer-20  answerof-116898' value='481783' \/>&nbsp;<label for='answer-id-481783' id='answer-label-481783' class=' answer label-20'><span class='answer'>Return on equity<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType20' value='radio' class=''><\/div><div class='watu-question' id='question-21'><div class='question-content'><p><span class='watu_num'>21. <\/span>Counterparty credit risk assessment differs from traditional credit risk assessment in all of the following features EXCEPT:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116899' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481784' \/><div class='watu-question-choice'><input type='radio' name='answer-116899[]' id='answer-id-481784' class='answer answer-21  answerof-116899' value='481784' \/>&nbsp;<label for='answer-id-481784' id='answer-label-481784' class=' answer label-21'><span class='answer'>Exposures can often be netted<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481785' \/><div class='watu-question-choice'><input type='radio' name='answer-116899[]' id='answer-id-481785' class='answer answer-21  answerof-116899' value='481785' \/>&nbsp;<label for='answer-id-481785' id='answer-label-481785' class=' answer label-21'><span class='answer'>Exposure at default may be negatively correlated to the probability of default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481786' \/><div class='watu-question-choice'><input type='radio' name='answer-116899[]' id='answer-id-481786' class='answer answer-21  answerof-116899' value='481786' \/>&nbsp;<label for='answer-id-481786' id='answer-label-481786' class=' answer label-21'><span class='answer'>Counterparty risk creates a two-way credit exposure<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481787' \/><div class='watu-question-choice'><input type='radio' name='answer-116899[]' id='answer-id-481787' class='answer answer-21  answerof-116899' value='481787' \/>&nbsp;<label for='answer-id-481787' id='answer-label-481787' class=' answer label-21'><span class='answer'>Collateral arrangements are typically static in nature<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType21' value='radio' class=''><\/div><div class='watu-question' id='question-22'><div class='question-content'><p><span class='watu_num'>22. <\/span>All of the following performance statistics typically benefit country&#8217;s creditworthiness EXCEPT:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116900' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481788' \/><div class='watu-question-choice'><input type='radio' name='answer-116900[]' id='answer-id-481788' class='answer answer-22  answerof-116900' value='481788' \/>&nbsp;<label for='answer-id-481788' id='answer-label-481788' class=' answer label-22'><span class='answer'>Low unemployment<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481789' \/><div class='watu-question-choice'><input type='radio' name='answer-116900[]' id='answer-id-481789' class='answer answer-22  answerof-116900' value='481789' \/>&nbsp;<label for='answer-id-481789' id='answer-label-481789' class=' answer label-22'><span class='answer'>Low inflation<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481790' \/><div class='watu-question-choice'><input type='radio' name='answer-116900[]' id='answer-id-481790' class='answer answer-22  answerof-116900' value='481790' \/>&nbsp;<label for='answer-id-481790' id='answer-label-481790' class=' answer label-22'><span class='answer'>High degrees of investment<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481791' \/><div class='watu-question-choice'><input type='radio' name='answer-116900[]' id='answer-id-481791' class='answer answer-22  answerof-116900' value='481791' \/>&nbsp;<label for='answer-id-481791' id='answer-label-481791' class=' answer label-22'><span class='answer'>Low degrees of savings<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType22' value='radio' class=''><\/div><div class='watu-question' id='question-23'><div class='question-content'><p><span class='watu_num'>23. <\/span>A financial analyst is trying to distinguish credit risk from market risk. A $100 loan collateralized with $200 in stock has limited ___, but an uncollateralized obligation issued by a large bank to pay an amount linked to the long-term performance of the Nikkei 225 Index that measures the performance of the leading Japanese stocks on the Tokyo Stock Exchange likely has more ___ than ___.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116901' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481792' \/><div class='watu-question-choice'><input type='radio' name='answer-116901[]' id='answer-id-481792' class='answer answer-23  answerof-116901' value='481792' \/>&nbsp;<label for='answer-id-481792' id='answer-label-481792' class=' answer label-23'><span class='answer'>Legal risk; market risk; credit risk<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481793' \/><div class='watu-question-choice'><input type='radio' name='answer-116901[]' id='answer-id-481793' class='answer answer-23  answerof-116901' value='481793' \/>&nbsp;<label for='answer-id-481793' id='answer-label-481793' class=' answer label-23'><span class='answer'>Market risk; market risk; credit risk<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481794' \/><div class='watu-question-choice'><input type='radio' name='answer-116901[]' id='answer-id-481794' class='answer answer-23  answerof-116901' value='481794' \/>&nbsp;<label for='answer-id-481794' id='answer-label-481794' class=' answer label-23'><span class='answer'>Market risk; credit risk; market risk<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481795' \/><div class='watu-question-choice'><input type='radio' name='answer-116901[]' id='answer-id-481795' class='answer answer-23  answerof-116901' value='481795' \/>&nbsp;<label for='answer-id-481795' id='answer-label-481795' class=' answer label-23'><span class='answer'>Credit risk, legal risk; market risk<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType23' value='radio' class=''><\/div><div class='watu-question' id='question-24'><div class='question-content'><p><span class='watu_num'>24. <\/span>Which one of the following four statements regarding counterparty credit risk is INCORRECT?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116902' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481796' \/><div class='watu-question-choice'><input type='radio' name='answer-116902[]' id='answer-id-481796' class='answer answer-24  answerof-116902' value='481796' \/>&nbsp;<label for='answer-id-481796' id='answer-label-481796' class=' answer label-24'><span class='answer'>Counterparty credit risk refers to the inability to realize gains in a contract with a counterparty due to its default.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481797' \/><div class='watu-question-choice'><input type='radio' name='answer-116902[]' id='answer-id-481797' class='answer answer-24  answerof-116902' value='481797' \/>&nbsp;<label for='answer-id-481797' id='answer-label-481797' class=' answer label-24'><span class='answer'>The exposure at default is variable due to fluctuations in swap valuations.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481798' \/><div class='watu-question-choice'><input type='radio' name='answer-116902[]' id='answer-id-481798' class='answer answer-24  answerof-116902' value='481798' \/>&nbsp;<label for='answer-id-481798' id='answer-label-481798' class=' answer label-24'><span class='answer'>The exposure at default can be negatively correlated to probability of default.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481799' \/><div class='watu-question-choice'><input type='radio' name='answer-116902[]' id='answer-id-481799' class='answer answer-24  answerof-116902' value='481799' \/>&nbsp;<label for='answer-id-481799' id='answer-label-481799' class=' answer label-24'><span class='answer'>Dynamic collateral provisions often increase counterparty risk considerably.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType24' value='radio' class=''><\/div><div class='watu-question' id='question-25'><div class='question-content'><p><span class='watu_num'>25. <\/span>A credit risk analyst is evaluating factors that quantify credit risk exposures.<br \/>\n<br \/>The risk that the borrower would fail to make full and timely repayments of its financial obligations over a given time horizon typically refers to:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116903' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481800' \/><div class='watu-question-choice'><input type='radio' name='answer-116903[]' id='answer-id-481800' class='answer answer-25  answerof-116903' value='481800' \/>&nbsp;<label for='answer-id-481800' id='answer-label-481800' class=' answer label-25'><span class='answer'>Duration of default.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481801' \/><div class='watu-question-choice'><input type='radio' name='answer-116903[]' id='answer-id-481801' class='answer answer-25  answerof-116903' value='481801' \/>&nbsp;<label for='answer-id-481801' id='answer-label-481801' class=' answer label-25'><span class='answer'>Exposure at default.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481802' \/><div class='watu-question-choice'><input type='radio' name='answer-116903[]' id='answer-id-481802' class='answer answer-25  answerof-116903' value='481802' \/>&nbsp;<label for='answer-id-481802' id='answer-label-481802' class=' answer label-25'><span class='answer'>Loss given default.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481803' \/><div class='watu-question-choice'><input type='radio' name='answer-116903[]' id='answer-id-481803' class='answer answer-25  answerof-116903' value='481803' \/>&nbsp;<label for='answer-id-481803' id='answer-label-481803' class=' answer label-25'><span class='answer'>Probability of default.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType25' value='radio' class=''><\/div><div class='watu-question' id='question-26'><div class='question-content'><p><span class='watu_num'>26. <\/span>Which one of the following four options correctly identifies the core difference between bonds and loans?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116904' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481804' \/><div class='watu-question-choice'><input type='radio' name='answer-116904[]' id='answer-id-481804' class='answer answer-26  answerof-116904' value='481804' \/>&nbsp;<label for='answer-id-481804' id='answer-label-481804' class=' answer label-26'><span class='answer'>These instruments receive a different legal treatment.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481805' \/><div class='watu-question-choice'><input type='radio' name='answer-116904[]' id='answer-id-481805' class='answer answer-26  answerof-116904' value='481805' \/>&nbsp;<label for='answer-id-481805' id='answer-label-481805' class=' answer label-26'><span class='answer'>These instruments have different pricing drivers.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481806' \/><div class='watu-question-choice'><input type='radio' name='answer-116904[]' id='answer-id-481806' class='answer answer-26  answerof-116904' value='481806' \/>&nbsp;<label for='answer-id-481806' id='answer-label-481806' class=' answer label-26'><span class='answer'>These instruments cannot be used to estimate credit capital under provisions of the Basel II Accord.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481807' \/><div class='watu-question-choice'><input type='radio' name='answer-116904[]' id='answer-id-481807' class='answer answer-26  answerof-116904' value='481807' \/>&nbsp;<label for='answer-id-481807' id='answer-label-481807' class=' answer label-26'><span class='answer'>These instruments are subject to different credit counterparty regulations.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType26' value='radio' class=''><\/div><div class='watu-question' id='question-27'><div class='question-content'><p><span class='watu_num'>27. <\/span>Which one of the following four formulas correctly identifies the expected loss for all credit instruments?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116905' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481808' \/><div class='watu-question-choice'><input type='radio' name='answer-116905[]' id='answer-id-481808' class='answer answer-27  answerof-116905' value='481808' \/>&nbsp;<label for='answer-id-481808' id='answer-label-481808' class=' answer label-27'><span class='answer'>Expected Loss = Probability of Default x Loss Given Default x Exposure at Default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481809' \/><div class='watu-question-choice'><input type='radio' name='answer-116905[]' id='answer-id-481809' class='answer answer-27  answerof-116905' value='481809' \/>&nbsp;<label for='answer-id-481809' id='answer-label-481809' class=' answer label-27'><span class='answer'>Expected Loss = Probability of Default x Loss Given Default + Exposure at Default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481810' \/><div class='watu-question-choice'><input type='radio' name='answer-116905[]' id='answer-id-481810' class='answer answer-27  answerof-116905' value='481810' \/>&nbsp;<label for='answer-id-481810' id='answer-label-481810' class=' answer label-27'><span class='answer'>Expected Loss = Probability of Default x Loss Given Default &#8211; Exposure at Default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481811' \/><div class='watu-question-choice'><input type='radio' name='answer-116905[]' id='answer-id-481811' class='answer answer-27  answerof-116905' value='481811' \/>&nbsp;<label for='answer-id-481811' id='answer-label-481811' class=' answer label-27'><span class='answer'>Expected Loss = Probability of Default x Loss Given Default \/ Exposure at Default<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType27' value='radio' class=''><\/div><div class='watu-question' id='question-28'><div class='question-content'><p><span class='watu_num'>28. <\/span>Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). The loan is collateralized with $55,000. The loan also has an annual expected default rate of 2%, and loss given default at 50%.<br \/>\n<br \/>In this case, what will the bank&#8217;s exposure at default (EAD) be?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116906' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481812' \/><div class='watu-question-choice'><input type='radio' name='answer-116906[]' id='answer-id-481812' class='answer answer-28  answerof-116906' value='481812' \/>&nbsp;<label for='answer-id-481812' id='answer-label-481812' class=' answer label-28'><span class='answer'>$25,000<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481813' \/><div class='watu-question-choice'><input type='radio' name='answer-116906[]' id='answer-id-481813' class='answer answer-28  answerof-116906' value='481813' \/>&nbsp;<label for='answer-id-481813' id='answer-label-481813' class=' answer label-28'><span class='answer'>$50,000<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481814' \/><div class='watu-question-choice'><input type='radio' name='answer-116906[]' id='answer-id-481814' class='answer answer-28  answerof-116906' value='481814' \/>&nbsp;<label for='answer-id-481814' id='answer-label-481814' class=' answer label-28'><span class='answer'>$75,000<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481815' \/><div class='watu-question-choice'><input type='radio' name='answer-116906[]' id='answer-id-481815' class='answer answer-28  answerof-116906' value='481815' \/>&nbsp;<label for='answer-id-481815' id='answer-label-481815' class=' answer label-28'><span class='answer'>$105,000<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType28' value='radio' class=''><\/div><div class='watu-question' id='question-29'><div class='question-content'><p><span class='watu_num'>29. <\/span>Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). The loan is collateralized with $55,000. The loan also has an annual expected default rate of 2%, and loss given default at 50%.<br \/>\n<br \/>In this case, what will the bank&#8217;s expected loss be?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116907' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481816' \/><div class='watu-question-choice'><input type='radio' name='answer-116907[]' id='answer-id-481816' class='answer answer-29  answerof-116907' value='481816' \/>&nbsp;<label for='answer-id-481816' id='answer-label-481816' class=' answer label-29'><span class='answer'>$500<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481817' \/><div class='watu-question-choice'><input type='radio' name='answer-116907[]' id='answer-id-481817' class='answer answer-29  answerof-116907' value='481817' \/>&nbsp;<label for='answer-id-481817' id='answer-label-481817' class=' answer label-29'><span class='answer'>$750<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481818' \/><div class='watu-question-choice'><input type='radio' name='answer-116907[]' id='answer-id-481818' class='answer answer-29  answerof-116907' value='481818' \/>&nbsp;<label for='answer-id-481818' id='answer-label-481818' class=' answer label-29'><span class='answer'>$1,000<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481819' \/><div class='watu-question-choice'><input type='radio' name='answer-116907[]' id='answer-id-481819' class='answer answer-29  answerof-116907' value='481819' \/>&nbsp;<label for='answer-id-481819' id='answer-label-481819' class=' answer label-29'><span class='answer'>$1,300<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType29' value='radio' class=''><\/div><div class='watu-question' id='question-30'><div class='question-content'><p><span class='watu_num'>30. <\/span>Gamma Bank provides a $100,000 loan to Big Bath retail stores at 5% interest rate (paid annually). The loan also has an annual expected default rate of 2%, and loss given default at 50%. In this case, what will the bank&#8217;s expected loss be? What is the expected loss of this loan?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116908' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481820' \/><div class='watu-question-choice'><input type='radio' name='answer-116908[]' id='answer-id-481820' class='answer answer-30  answerof-116908' value='481820' \/>&nbsp;<label for='answer-id-481820' id='answer-label-481820' class=' answer label-30'><span class='answer'>$300<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481821' \/><div class='watu-question-choice'><input type='radio' name='answer-116908[]' id='answer-id-481821' class='answer answer-30  answerof-116908' value='481821' \/>&nbsp;<label for='answer-id-481821' id='answer-label-481821' class=' answer label-30'><span class='answer'>$550<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481822' \/><div class='watu-question-choice'><input type='radio' name='answer-116908[]' id='answer-id-481822' class='answer answer-30  answerof-116908' value='481822' \/>&nbsp;<label for='answer-id-481822' id='answer-label-481822' class=' answer label-30'><span class='answer'>$750<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481823' \/><div class='watu-question-choice'><input type='radio' name='answer-116908[]' id='answer-id-481823' class='answer answer-30  answerof-116908' value='481823' \/>&nbsp;<label for='answer-id-481823' id='answer-label-481823' class=' answer label-30'><span class='answer'>$1,050<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType30' value='radio' class=''><\/div><div class='watu-question' id='question-31'><div class='question-content'><p><span class='watu_num'>31. <\/span>Which of the following attributes are typical for early models of statistical credit analysis?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116909' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481824' \/><div class='watu-question-choice'><input type='radio' name='answer-116909[]' id='answer-id-481824' class='answer answer-31  answerof-116909' value='481824' \/>&nbsp;<label for='answer-id-481824' id='answer-label-481824' class=' answer label-31'><span class='answer'>These models assumed the default of any obligor was independent of the default of any other.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481825' \/><div class='watu-question-choice'><input type='radio' name='answer-116909[]' id='answer-id-481825' class='answer answer-31  answerof-116909' value='481825' \/>&nbsp;<label for='answer-id-481825' id='answer-label-481825' class=' answer label-31'><span class='answer'>The underlying default assumptions were analytically inconvenient.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481826' \/><div class='watu-question-choice'><input type='radio' name='answer-116909[]' id='answer-id-481826' class='answer answer-31  answerof-116909' value='481826' \/>&nbsp;<label for='answer-id-481826' id='answer-label-481826' class=' answer label-31'><span class='answer'>The underlying default assumptions failed to develop relatively simple formulas for the determination of portfolio credit risk.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481827' \/><div class='watu-question-choice'><input type='radio' name='answer-116909[]' id='answer-id-481827' class='answer answer-31  answerof-116909' value='481827' \/>&nbsp;<label for='answer-id-481827' id='answer-label-481827' class=' answer label-31'><span class='answer'>These models effectively incorporated herd behavior.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType31' value='radio' class=''><\/div><div class='watu-question' id='question-32'><div class='question-content'><p><span class='watu_num'>32. <\/span>A credit analyst wants to determine if her bank is taking too much credit risk.<br \/>\n<br \/>Which one of the following four strategies will typically provide the most convenient approach to quantify the credit risk exposure for the bank?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116910' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481828' \/><div class='watu-question-choice'><input type='radio' name='answer-116910[]' id='answer-id-481828' class='answer answer-32  answerof-116910' value='481828' \/>&nbsp;<label for='answer-id-481828' id='answer-label-481828' class=' answer label-32'><span class='answer'>Assessing aggregate exposure at default at various time points and at various confidence levels<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481829' \/><div class='watu-question-choice'><input type='radio' name='answer-116910[]' id='answer-id-481829' class='answer answer-32  answerof-116910' value='481829' \/>&nbsp;<label for='answer-id-481829' id='answer-label-481829' class=' answer label-32'><span class='answer'>Simplifying individual credit exposures so that they can be combined into a simplified expression of portfolio risk for the bank<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481830' \/><div class='watu-question-choice'><input type='radio' name='answer-116910[]' id='answer-id-481830' class='answer answer-32  answerof-116910' value='481830' \/>&nbsp;<label for='answer-id-481830' id='answer-label-481830' class=' answer label-32'><span class='answer'>Using stress testing techniques to forecast underlying macroeconomic factors and bank&#8217;s idiosyncratic risks<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481831' \/><div class='watu-question-choice'><input type='radio' name='answer-116910[]' id='answer-id-481831' class='answer answer-32  answerof-116910' value='481831' \/>&nbsp;<label for='answer-id-481831' id='answer-label-481831' class=' answer label-32'><span class='answer'>Analyzing distribution of bank&#8217;s credit losses and mapping credit risks at various statistical levels<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType32' value='radio' class=''><\/div><div class='watu-question' id='question-33'><div class='question-content'><p><span class='watu_num'>33. <\/span>When looking at the distribution of portfolio credit losses, the shape of the loss distribution is ___ , as the likelihood of total losses, the sum of expected and unexpected credit losses, is ___ than the likelihood of no credit losses.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116911' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481832' \/><div class='watu-question-choice'><input type='radio' name='answer-116911[]' id='answer-id-481832' class='answer answer-33  answerof-116911' value='481832' \/>&nbsp;<label for='answer-id-481832' id='answer-label-481832' class=' answer label-33'><span class='answer'>Symmetric; less<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481833' \/><div class='watu-question-choice'><input type='radio' name='answer-116911[]' id='answer-id-481833' class='answer answer-33  answerof-116911' value='481833' \/>&nbsp;<label for='answer-id-481833' id='answer-label-481833' class=' answer label-33'><span class='answer'>Symmetric; greater<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481834' \/><div class='watu-question-choice'><input type='radio' name='answer-116911[]' id='answer-id-481834' class='answer answer-33  answerof-116911' value='481834' \/>&nbsp;<label for='answer-id-481834' id='answer-label-481834' class=' answer label-33'><span class='answer'>Asymmetric; less<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481835' \/><div class='watu-question-choice'><input type='radio' name='answer-116911[]' id='answer-id-481835' class='answer answer-33  answerof-116911' value='481835' \/>&nbsp;<label for='answer-id-481835' id='answer-label-481835' class=' answer label-33'><span class='answer'>Asymmetric; greater<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType33' value='radio' class=''><\/div><div class='watu-question' id='question-34'><div class='question-content'><p><span class='watu_num'>34. <\/span>Which one of the following four statements regarding bank&#8217;s exposure to credit and default risk is INCORRECT?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116912' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481836' \/><div class='watu-question-choice'><input type='radio' name='answer-116912[]' id='answer-id-481836' class='answer answer-34  answerof-116912' value='481836' \/>&nbsp;<label for='answer-id-481836' id='answer-label-481836' class=' answer label-34'><span class='answer'>The more the bank diversifies its credit portfolio, the better spread its credit risks become.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481837' \/><div class='watu-question-choice'><input type='radio' name='answer-116912[]' id='answer-id-481837' class='answer answer-34  answerof-116912' value='481837' \/>&nbsp;<label for='answer-id-481837' id='answer-label-481837' class=' answer label-34'><span class='answer'>In debt management, the value of any loan exposure will change typically in a fashion similar the same way that an equity investment can.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481838' \/><div class='watu-question-choice'><input type='radio' name='answer-116912[]' id='answer-id-481838' class='answer answer-34  answerof-116912' value='481838' \/>&nbsp;<label for='answer-id-481838' id='answer-label-481838' class=' answer label-34'><span class='answer'>In debt management, the goal is to minimize the effect of any defaults.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481839' \/><div class='watu-question-choice'><input type='radio' name='answer-116912[]' id='answer-id-481839' class='answer answer-34  answerof-116912' value='481839' \/>&nbsp;<label for='answer-id-481839' id='answer-label-481839' class=' answer label-34'><span class='answer'>Default risk cannot be hedged away fully, and it will always exist for the holder of the credit or for the person insuring against the credit or default event.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType34' value='radio' class=''><\/div><div class='watu-question' id='question-35'><div class='question-content'><p><span class='watu_num'>35. <\/span>To manage its credit portfolio, Beta Bank can directly sell the following portfolio elements:<br \/>\n<br \/>I. Bonds<br \/>\n<br \/>II. Marketable loans<br \/>\n<br \/>III. Credit card loans<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116913' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481840' \/><div class='watu-question-choice'><input type='radio' name='answer-116913[]' id='answer-id-481840' class='answer answer-35  answerof-116913' value='481840' \/>&nbsp;<label for='answer-id-481840' id='answer-label-481840' class=' answer label-35'><span class='answer'>I<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481841' \/><div class='watu-question-choice'><input type='radio' name='answer-116913[]' id='answer-id-481841' class='answer answer-35  answerof-116913' value='481841' \/>&nbsp;<label for='answer-id-481841' id='answer-label-481841' class=' answer label-35'><span class='answer'>II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481842' \/><div class='watu-question-choice'><input type='radio' name='answer-116913[]' id='answer-id-481842' class='answer answer-35  answerof-116913' value='481842' \/>&nbsp;<label for='answer-id-481842' id='answer-label-481842' class=' answer label-35'><span class='answer'>I, II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481843' \/><div class='watu-question-choice'><input type='radio' name='answer-116913[]' id='answer-id-481843' class='answer answer-35  answerof-116913' value='481843' \/>&nbsp;<label for='answer-id-481843' id='answer-label-481843' class=' answer label-35'><span class='answer'>II, III<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType35' value='radio' class=''><\/div><div class='watu-question' id='question-36'><div class='question-content'><p><span class='watu_num'>36. <\/span>As DeltaBank explores the securitization business, it is most likely to embrace securitization to:<br \/>\n<br \/>I. Bring transparency to the bank&#8217;s balance sheet<br \/>\n<br \/>II. Create a new profit center for the bank<br \/>\n<br \/>III. Strategically release risk capital and regulatory capital for redeployment<br \/>\n<br \/>IV. Generate cash for additional debt origination<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116914' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481844' \/><div class='watu-question-choice'><input type='radio' name='answer-116914[]' id='answer-id-481844' class='answer answer-36  answerof-116914' value='481844' \/>&nbsp;<label for='answer-id-481844' id='answer-label-481844' class=' answer label-36'><span class='answer'>I, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481845' \/><div class='watu-question-choice'><input type='radio' name='answer-116914[]' id='answer-id-481845' class='answer answer-36  answerof-116914' value='481845' \/>&nbsp;<label for='answer-id-481845' id='answer-label-481845' class=' answer label-36'><span class='answer'>II, IV<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481846' \/><div class='watu-question-choice'><input type='radio' name='answer-116914[]' id='answer-id-481846' class='answer answer-36  answerof-116914' value='481846' \/>&nbsp;<label for='answer-id-481846' id='answer-label-481846' class=' answer label-36'><span class='answer'>I, II, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481847' \/><div class='watu-question-choice'><input type='radio' name='answer-116914[]' id='answer-id-481847' class='answer answer-36  answerof-116914' value='481847' \/>&nbsp;<label for='answer-id-481847' id='answer-label-481847' class=' answer label-36'><span class='answer'>II, III, IV<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType36' value='radio' class=''><\/div><div class='watu-question' id='question-37'><div class='question-content'><p><span class='watu_num'>37. <\/span>After entering the securitization business, Delta Bank increases its cash efficiency by selling off the lower risk portions of the portfolio credit risk. This process ___ risk on the residual pieces of the credit portfolio, and as a result it ___ return on equity for the bank.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116915' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481848' \/><div class='watu-question-choice'><input type='radio' name='answer-116915[]' id='answer-id-481848' class='answer answer-37  answerof-116915' value='481848' \/>&nbsp;<label for='answer-id-481848' id='answer-label-481848' class=' answer label-37'><span class='answer'>Decreases; increases;<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481849' \/><div class='watu-question-choice'><input type='radio' name='answer-116915[]' id='answer-id-481849' class='answer answer-37  answerof-116915' value='481849' \/>&nbsp;<label for='answer-id-481849' id='answer-label-481849' class=' answer label-37'><span class='answer'>Increases; increases;<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481850' \/><div class='watu-question-choice'><input type='radio' name='answer-116915[]' id='answer-id-481850' class='answer answer-37  answerof-116915' value='481850' \/>&nbsp;<label for='answer-id-481850' id='answer-label-481850' class=' answer label-37'><span class='answer'>Increases; decreases;<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481851' \/><div class='watu-question-choice'><input type='radio' name='answer-116915[]' id='answer-id-481851' class='answer answer-37  answerof-116915' value='481851' \/>&nbsp;<label for='answer-id-481851' id='answer-label-481851' class=' answer label-37'><span class='answer'>Decreases; increases;<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType37' value='radio' class=''><\/div><div class='watu-question' id='question-38'><div class='question-content'><p><span class='watu_num'>38. <\/span>Which of the following risk types are historically associated with credit derivatives?<br \/>\n<br \/>I. Documentation risk<br \/>\n<br \/>II. Definition of credit events<br \/>\n<br \/>III. Occurrence of credit events<br \/>\n<br \/>IV. Enterprise risk<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116916' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481852' \/><div class='watu-question-choice'><input type='radio' name='answer-116916[]' id='answer-id-481852' class='answer answer-38  answerof-116916' value='481852' \/>&nbsp;<label for='answer-id-481852' id='answer-label-481852' class=' answer label-38'><span class='answer'>I, IV<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481853' \/><div class='watu-question-choice'><input type='radio' name='answer-116916[]' id='answer-id-481853' class='answer answer-38  answerof-116916' value='481853' \/>&nbsp;<label for='answer-id-481853' id='answer-label-481853' class=' answer label-38'><span class='answer'>I, II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481854' \/><div class='watu-question-choice'><input type='radio' name='answer-116916[]' id='answer-id-481854' class='answer answer-38  answerof-116916' value='481854' \/>&nbsp;<label for='answer-id-481854' id='answer-label-481854' class=' answer label-38'><span class='answer'>I, II, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481855' \/><div class='watu-question-choice'><input type='radio' name='answer-116916[]' id='answer-id-481855' class='answer answer-38  answerof-116916' value='481855' \/>&nbsp;<label for='answer-id-481855' id='answer-label-481855' class=' answer label-38'><span class='answer'>II, III, IV<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType38' value='radio' class=''><\/div><div class='watu-question' id='question-39'><div class='question-content'><p><span class='watu_num'>39. <\/span>The pricing of credit default swaps is a function of all of the following EXCEPT:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116917' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481856' \/><div class='watu-question-choice'><input type='radio' name='answer-116917[]' id='answer-id-481856' class='answer answer-39  answerof-116917' value='481856' \/>&nbsp;<label for='answer-id-481856' id='answer-label-481856' class=' answer label-39'><span class='answer'>Probability of default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481857' \/><div class='watu-question-choice'><input type='radio' name='answer-116917[]' id='answer-id-481857' class='answer answer-39  answerof-116917' value='481857' \/>&nbsp;<label for='answer-id-481857' id='answer-label-481857' class=' answer label-39'><span class='answer'>Duration<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481858' \/><div class='watu-question-choice'><input type='radio' name='answer-116917[]' id='answer-id-481858' class='answer answer-39  answerof-116917' value='481858' \/>&nbsp;<label for='answer-id-481858' id='answer-label-481858' class=' answer label-39'><span class='answer'>Loss given default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481859' \/><div class='watu-question-choice'><input type='radio' name='answer-116917[]' id='answer-id-481859' class='answer answer-39  answerof-116917' value='481859' \/>&nbsp;<label for='answer-id-481859' id='answer-label-481859' class=' answer label-39'><span class='answer'>Market spreads<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType39' value='radio' class=''><\/div><div class='watu-question' id='question-40'><div class='question-content'><p><span class='watu_num'>40. <\/span>To safeguard its capital and obtain insurance if the borrowers cannot repay their loans, Gamma Bank accepts financial collateral to manage its credit risk and mitigate the effect of the borrowers&#8217; defaults.<br \/>\n<br \/>Gamma Bank will typically accept all of the following instruments as financial collateral EXCEPT?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116918' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481860' \/><div class='watu-question-choice'><input type='radio' name='answer-116918[]' id='answer-id-481860' class='answer answer-40  answerof-116918' value='481860' \/>&nbsp;<label for='answer-id-481860' id='answer-label-481860' class=' answer label-40'><span class='answer'>Unrated bonds issued and traded on a recognized exchange<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481861' \/><div class='watu-question-choice'><input type='radio' name='answer-116918[]' id='answer-id-481861' class='answer answer-40  answerof-116918' value='481861' \/>&nbsp;<label for='answer-id-481861' id='answer-label-481861' class=' answer label-40'><span class='answer'>Equities and convertible bonds included in a main market index<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481862' \/><div class='watu-question-choice'><input type='radio' name='answer-116918[]' id='answer-id-481862' class='answer answer-40  answerof-116918' value='481862' \/>&nbsp;<label for='answer-id-481862' id='answer-label-481862' class=' answer label-40'><span class='answer'>Commercial debts owed to a company in a form of receivables<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481863' \/><div class='watu-question-choice'><input type='radio' name='answer-116918[]' id='answer-id-481863' class='answer answer-40  answerof-116918' value='481863' \/>&nbsp;<label for='answer-id-481863' id='answer-label-481863' class=' answer label-40'><span class='answer'>Mutual fund shares and similar unit investment vehicles subject to daily quotes<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType40' value='radio' class=''><\/div><div class='watu-question' id='question-41'><div class='question-content'><p><span class='watu_num'>41. <\/span>Except for the credit quality of the Credit Default Swap protection seller, the following relationship correctly approximates the yield on a risk-free instrument:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116919' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481864' \/><div class='watu-question-choice'><input type='radio' name='answer-116919[]' id='answer-id-481864' class='answer answer-41  answerof-116919' value='481864' \/>&nbsp;<label for='answer-id-481864' id='answer-label-481864' class=' answer label-41'><span class='answer'>Bond + CDS<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481865' \/><div class='watu-question-choice'><input type='radio' name='answer-116919[]' id='answer-id-481865' class='answer answer-41  answerof-116919' value='481865' \/>&nbsp;<label for='answer-id-481865' id='answer-label-481865' class=' answer label-41'><span class='answer'>Bond + CDS + Market Spread<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481866' \/><div class='watu-question-choice'><input type='radio' name='answer-116919[]' id='answer-id-481866' class='answer answer-41  answerof-116919' value='481866' \/>&nbsp;<label for='answer-id-481866' id='answer-label-481866' class=' answer label-41'><span class='answer'>Bond &#8211; CDS<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481867' \/><div class='watu-question-choice'><input type='radio' name='answer-116919[]' id='answer-id-481867' class='answer answer-41  answerof-116919' value='481867' \/>&nbsp;<label for='answer-id-481867' id='answer-label-481867' class=' answer label-41'><span class='answer'>Bond &#8211; CDS &#8211; Market spread<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType41' value='radio' class=''><\/div><div class='watu-question' id='question-42'><div class='question-content'><p><span class='watu_num'>42. <\/span>Which of the following factors can cause obligors to default at the same time?<br \/>\n<br \/>I. Obligors may be harmed by exposures to similar risk factors simultaneously.<br \/>\n<br \/>II. Obligors may exhibit herd behavior.<br \/>\n<br \/>III. Obligors may be subject to the sampling bias.<br \/>\n<br \/>IV. Obligors may exhibit speculative bias.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116920' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481868' \/><div class='watu-question-choice'><input type='radio' name='answer-116920[]' id='answer-id-481868' class='answer answer-42  answerof-116920' value='481868' \/>&nbsp;<label for='answer-id-481868' id='answer-label-481868' class=' answer label-42'><span class='answer'>I<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481869' \/><div class='watu-question-choice'><input type='radio' name='answer-116920[]' id='answer-id-481869' class='answer answer-42  answerof-116920' value='481869' \/>&nbsp;<label for='answer-id-481869' id='answer-label-481869' class=' answer label-42'><span class='answer'>II, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481870' \/><div class='watu-question-choice'><input type='radio' name='answer-116920[]' id='answer-id-481870' class='answer answer-42  answerof-116920' value='481870' \/>&nbsp;<label for='answer-id-481870' id='answer-label-481870' class=' answer label-42'><span class='answer'>I, II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481871' \/><div class='watu-question-choice'><input type='radio' name='answer-116920[]' id='answer-id-481871' class='answer answer-42  answerof-116920' value='481871' \/>&nbsp;<label for='answer-id-481871' id='answer-label-481871' class=' answer label-42'><span class='answer'>III, IV<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType42' value='radio' class=''><\/div><div class='watu-question' id='question-43'><div class='question-content'><p><span class='watu_num'>43. <\/span>After entering the securitization business, Delta Bank increases its cash efficiency by selling off the lower risk portions of the portfolio credit risk. This process ___ return on equity for the bank, because the cash generated by the risk-transfer and the overall ___ of the bank&#8217;s exposure to the risk.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116921' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481872' \/><div class='watu-question-choice'><input type='radio' name='answer-116921[]' id='answer-id-481872' class='answer answer-43  answerof-116921' value='481872' \/>&nbsp;<label for='answer-id-481872' id='answer-label-481872' class=' answer label-43'><span class='answer'>Increases; increase;<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481873' \/><div class='watu-question-choice'><input type='radio' name='answer-116921[]' id='answer-id-481873' class='answer answer-43  answerof-116921' value='481873' \/>&nbsp;<label for='answer-id-481873' id='answer-label-481873' class=' answer label-43'><span class='answer'>Increases; reduction;<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481874' \/><div class='watu-question-choice'><input type='radio' name='answer-116921[]' id='answer-id-481874' class='answer answer-43  answerof-116921' value='481874' \/>&nbsp;<label for='answer-id-481874' id='answer-label-481874' class=' answer label-43'><span class='answer'>Decreases; increase;<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481875' \/><div class='watu-question-choice'><input type='radio' name='answer-116921[]' id='answer-id-481875' class='answer answer-43  answerof-116921' value='481875' \/>&nbsp;<label for='answer-id-481875' id='answer-label-481875' class=' answer label-43'><span class='answer'>Decreases; reduction;<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType43' value='radio' class=''><\/div><div class='watu-question' id='question-44'><div class='question-content'><p><span class='watu_num'>44. <\/span>When a credit risk manager analyzes default patterns in a specific neighborhood, she finds that defaults are increasing as the stigma of default evaporates, and more borrowers default.<br \/>\n<br \/>This phenomenon constitutes<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116922' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481876' \/><div class='watu-question-choice'><input type='radio' name='answer-116922[]' id='answer-id-481876' class='answer answer-44  answerof-116922' value='481876' \/>&nbsp;<label for='answer-id-481876' id='answer-label-481876' class=' answer label-44'><span class='answer'>Moral hazard<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481877' \/><div class='watu-question-choice'><input type='radio' name='answer-116922[]' id='answer-id-481877' class='answer answer-44  answerof-116922' value='481877' \/>&nbsp;<label for='answer-id-481877' id='answer-label-481877' class=' answer label-44'><span class='answer'>Speculative bias<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481878' \/><div class='watu-question-choice'><input type='radio' name='answer-116922[]' id='answer-id-481878' class='answer answer-44  answerof-116922' value='481878' \/>&nbsp;<label for='answer-id-481878' id='answer-label-481878' class=' answer label-44'><span class='answer'>Herd behavior<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481879' \/><div class='watu-question-choice'><input type='radio' name='answer-116922[]' id='answer-id-481879' class='answer answer-44  answerof-116922' value='481879' \/>&nbsp;<label for='answer-id-481879' id='answer-label-481879' class=' answer label-44'><span class='answer'>Adverse selection<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType44' value='radio' class=''><\/div><div class='watu-question' id='question-45'><div class='question-content'><p><span class='watu_num'>45. <\/span>ThetaBank has extended substantial financing to two mortgage companies, which these mortgage lenders use to finance their own lending. Individually, each of the mortgage companies has an exposure at default (EAD) of $20 million, with a loss given default (LGD) of 100%, and a probability of default of 10%. ThetaBank&#8217;s risk department predicts the joint probability of default at 5%.<br \/>\n<br \/>If the default risk of these mortgage companies were modeled as independent risks, what would be the probability of a cumulative $40 million loss from these two mortgage borrowers?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116923' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481880' \/><div class='watu-question-choice'><input type='radio' name='answer-116923[]' id='answer-id-481880' class='answer answer-45  answerof-116923' value='481880' \/>&nbsp;<label for='answer-id-481880' id='answer-label-481880' class=' answer label-45'><span class='answer'>0.01%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481881' \/><div class='watu-question-choice'><input type='radio' name='answer-116923[]' id='answer-id-481881' class='answer answer-45  answerof-116923' value='481881' \/>&nbsp;<label for='answer-id-481881' id='answer-label-481881' class=' answer label-45'><span class='answer'>0.1%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481882' \/><div class='watu-question-choice'><input type='radio' name='answer-116923[]' id='answer-id-481882' class='answer answer-45  answerof-116923' value='481882' \/>&nbsp;<label for='answer-id-481882' id='answer-label-481882' class=' answer label-45'><span class='answer'>1%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481883' \/><div class='watu-question-choice'><input type='radio' name='answer-116923[]' id='answer-id-481883' class='answer answer-45  answerof-116923' value='481883' \/>&nbsp;<label for='answer-id-481883' id='answer-label-481883' class=' answer label-45'><span class='answer'>10%<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType45' value='radio' class=''><\/div><div class='watu-question' id='question-46'><div class='question-content'><p><span class='watu_num'>46. <\/span>ThetaBank has extended substantial financing to two mortgage companies, which these mortgage lenders use to finance their own lending. Individually, each of the mortgage companies have an exposure at default (EAD) of $20 million, with a loss given default (LGD) of 100%, and a probability of default of 10%. ThetaBank&#8217;s risk department predicts the joint probability of default at 5%.<br \/>\n<br \/>If the default risk of these mortgage companies were modeled as independent risks, the actual probability would be underestimated by:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116924' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481884' \/><div class='watu-question-choice'><input type='radio' name='answer-116924[]' id='answer-id-481884' class='answer answer-46  answerof-116924' value='481884' \/>&nbsp;<label for='answer-id-481884' id='answer-label-481884' class=' answer label-46'><span class='answer'>1%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481885' \/><div class='watu-question-choice'><input type='radio' name='answer-116924[]' id='answer-id-481885' class='answer answer-46  answerof-116924' value='481885' \/>&nbsp;<label for='answer-id-481885' id='answer-label-481885' class=' answer label-46'><span class='answer'>2%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481886' \/><div class='watu-question-choice'><input type='radio' name='answer-116924[]' id='answer-id-481886' class='answer answer-46  answerof-116924' value='481886' \/>&nbsp;<label for='answer-id-481886' id='answer-label-481886' class=' answer label-46'><span class='answer'>3%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481887' \/><div class='watu-question-choice'><input type='radio' name='answer-116924[]' id='answer-id-481887' class='answer answer-46  answerof-116924' value='481887' \/>&nbsp;<label for='answer-id-481887' id='answer-label-481887' class=' answer label-46'><span class='answer'>4%<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType46' value='radio' class=''><\/div><div class='watu-question' id='question-47'><div class='question-content'><p><span class='watu_num'>47. <\/span>A credit portfolio manager analyzes a large retail credit portfolio.<br \/>\n<br \/>Which of the following factors will represent typical disadvantages of market-linked credit risk drivers?<br \/>\n<br \/>I. Need to supply a large number of input parameters to the model<br \/>\n<br \/>II. Slow computation speed due to higher simulation complexity<br \/>\n<br \/>III. Non-linear nature of the model applicable to a specific type of credit portfolios<br \/>\n<br \/>IV. Need to estimate a large number of unknown variable and use approximations<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116925' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481888' \/><div class='watu-question-choice'><input type='radio' name='answer-116925[]' id='answer-id-481888' class='answer answer-47  answerof-116925' value='481888' \/>&nbsp;<label for='answer-id-481888' id='answer-label-481888' class=' answer label-47'><span class='answer'>I<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481889' \/><div class='watu-question-choice'><input type='radio' name='answer-116925[]' id='answer-id-481889' class='answer answer-47  answerof-116925' value='481889' \/>&nbsp;<label for='answer-id-481889' id='answer-label-481889' class=' answer label-47'><span class='answer'>I, II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481890' \/><div class='watu-question-choice'><input type='radio' name='answer-116925[]' id='answer-id-481890' class='answer answer-47  answerof-116925' value='481890' \/>&nbsp;<label for='answer-id-481890' id='answer-label-481890' class=' answer label-47'><span class='answer'>II, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481891' \/><div class='watu-question-choice'><input type='radio' name='answer-116925[]' id='answer-id-481891' class='answer answer-47  answerof-116925' value='481891' \/>&nbsp;<label for='answer-id-481891' id='answer-label-481891' class=' answer label-47'><span class='answer'>III, IV<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType47' value='radio' class=''><\/div><div class='watu-question' id='question-48'><div class='question-content'><p><span class='watu_num'>48. <\/span>Which one of the following four metrics represents the difference between the expected loss and unexpected loss on a credit portfolio?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116926' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481892' \/><div class='watu-question-choice'><input type='radio' name='answer-116926[]' id='answer-id-481892' class='answer answer-48  answerof-116926' value='481892' \/>&nbsp;<label for='answer-id-481892' id='answer-label-481892' class=' answer label-48'><span class='answer'>Credit VaR<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481893' \/><div class='watu-question-choice'><input type='radio' name='answer-116926[]' id='answer-id-481893' class='answer answer-48  answerof-116926' value='481893' \/>&nbsp;<label for='answer-id-481893' id='answer-label-481893' class=' answer label-48'><span class='answer'>Probability of default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481894' \/><div class='watu-question-choice'><input type='radio' name='answer-116926[]' id='answer-id-481894' class='answer answer-48  answerof-116926' value='481894' \/>&nbsp;<label for='answer-id-481894' id='answer-label-481894' class=' answer label-48'><span class='answer'>Loss given default<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481895' \/><div class='watu-question-choice'><input type='radio' name='answer-116926[]' id='answer-id-481895' class='answer answer-48  answerof-116926' value='481895' \/>&nbsp;<label for='answer-id-481895' id='answer-label-481895' class=' answer label-48'><span class='answer'>Modified duration<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType48' value='radio' class=''><\/div><div class='watu-question' id='question-49'><div class='question-content'><p><span class='watu_num'>49. <\/span>Gamma Bank is active in loan underwriting and securitization business, and given its collective credit exposure, it will be typically most interested in the following types of portfolio credit risk:<br \/>\n<br \/>I. Expected loss<br \/>\n<br \/>II. Duration<br \/>\n<br \/>III. Unexpected loss<br \/>\n<br \/>IV. Factor sensitivities<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116927' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481896' \/><div class='watu-question-choice'><input type='radio' name='answer-116927[]' id='answer-id-481896' class='answer answer-49  answerof-116927' value='481896' \/>&nbsp;<label for='answer-id-481896' id='answer-label-481896' class=' answer label-49'><span class='answer'>I<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481897' \/><div class='watu-question-choice'><input type='radio' name='answer-116927[]' id='answer-id-481897' class='answer answer-49  answerof-116927' value='481897' \/>&nbsp;<label for='answer-id-481897' id='answer-label-481897' class=' answer label-49'><span class='answer'>II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481898' \/><div class='watu-question-choice'><input type='radio' name='answer-116927[]' id='answer-id-481898' class='answer answer-49  answerof-116927' value='481898' \/>&nbsp;<label for='answer-id-481898' id='answer-label-481898' class=' answer label-49'><span class='answer'>I, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481899' \/><div class='watu-question-choice'><input type='radio' name='answer-116927[]' id='answer-id-481899' class='answer answer-49  answerof-116927' value='481899' \/>&nbsp;<label for='answer-id-481899' id='answer-label-481899' class=' answer label-49'><span class='answer'>I, III, IV<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType49' value='radio' class=''><\/div><div class='watu-question' id='question-50'><div class='question-content'><p><span class='watu_num'>50. <\/span>To quantify the aggregate average loss for the credit portfolio and its possible constituent subportfolios, a credit portfolio manager should use the following metric:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116928' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481900' \/><div class='watu-question-choice'><input type='radio' name='answer-116928[]' id='answer-id-481900' class='answer answer-50  answerof-116928' value='481900' \/>&nbsp;<label for='answer-id-481900' id='answer-label-481900' class=' answer label-50'><span class='answer'>Credit VaR<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481901' \/><div class='watu-question-choice'><input type='radio' name='answer-116928[]' id='answer-id-481901' class='answer answer-50  answerof-116928' value='481901' \/>&nbsp;<label for='answer-id-481901' id='answer-label-481901' class=' answer label-50'><span class='answer'>Expected loss<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481902' \/><div class='watu-question-choice'><input type='radio' name='answer-116928[]' id='answer-id-481902' class='answer answer-50  answerof-116928' value='481902' \/>&nbsp;<label for='answer-id-481902' id='answer-label-481902' class=' answer label-50'><span class='answer'>Unexpected loss<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481903' \/><div class='watu-question-choice'><input type='radio' name='answer-116928[]' id='answer-id-481903' class='answer answer-50  answerof-116928' value='481903' \/>&nbsp;<label for='answer-id-481903' id='answer-label-481903' class=' answer label-50'><span class='answer'>Factor sensitivity<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType50' value='radio' class=''><\/div><div class='watu-question' id='question-51'><div class='question-content'><p><span class='watu_num'>51. <\/span>Which one of the following four alternatives lists the three most widely traded currencies on the global foreign exchange market, as of April 2007, in the decreasing order of market share? EUR is the abbreviation of the European euro, JPY is for the Japanese yen, and USD is for the United States dollar, respectively.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116929' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481904' \/><div class='watu-question-choice'><input type='radio' name='answer-116929[]' id='answer-id-481904' class='answer answer-51  answerof-116929' value='481904' \/>&nbsp;<label for='answer-id-481904' id='answer-label-481904' class=' answer label-51'><span class='answer'>JPY, EUR, USD<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481905' \/><div class='watu-question-choice'><input type='radio' name='answer-116929[]' id='answer-id-481905' class='answer answer-51  answerof-116929' value='481905' \/>&nbsp;<label for='answer-id-481905' id='answer-label-481905' class=' answer label-51'><span class='answer'>USD, EUR, JPY<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481906' \/><div class='watu-question-choice'><input type='radio' name='answer-116929[]' id='answer-id-481906' class='answer answer-51  answerof-116929' value='481906' \/>&nbsp;<label for='answer-id-481906' id='answer-label-481906' class=' answer label-51'><span class='answer'>USD, JPY, EUR<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481907' \/><div class='watu-question-choice'><input type='radio' name='answer-116929[]' id='answer-id-481907' class='answer answer-51  answerof-116929' value='481907' \/>&nbsp;<label for='answer-id-481907' id='answer-label-481907' class=' answer label-51'><span class='answer'>EUR, USD, JPY<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType51' value='radio' class=''><\/div><div class='watu-question' id='question-52'><div class='question-content'><p><span class='watu_num'>52. <\/span>An asset manager for a large mutual fund is considering forward exchange positions traded in a clearinghouse system and needs to mitigate the risks created as a result of this operation.<br \/>\n<br \/>Which of the following risks will be created as a result of the forward exchange transaction?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116930' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481908' \/><div class='watu-question-choice'><input type='radio' name='answer-116930[]' id='answer-id-481908' class='answer answer-52  answerof-116930' value='481908' \/>&nbsp;<label for='answer-id-481908' id='answer-label-481908' class=' answer label-52'><span class='answer'>Exchange rate risk<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481909' \/><div class='watu-question-choice'><input type='radio' name='answer-116930[]' id='answer-id-481909' class='answer answer-52  answerof-116930' value='481909' \/>&nbsp;<label for='answer-id-481909' id='answer-label-481909' class=' answer label-52'><span class='answer'>Exchange rate and interest rate risk<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481910' \/><div class='watu-question-choice'><input type='radio' name='answer-116930[]' id='answer-id-481910' class='answer answer-52  answerof-116930' value='481910' \/>&nbsp;<label for='answer-id-481910' id='answer-label-481910' class=' answer label-52'><span class='answer'>Credit risk<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481911' \/><div class='watu-question-choice'><input type='radio' name='answer-116930[]' id='answer-id-481911' class='answer answer-52  answerof-116930' value='481911' \/>&nbsp;<label for='answer-id-481911' id='answer-label-481911' class=' answer label-52'><span class='answer'>Exchange rate and credit risk<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType52' value='radio' class=''><\/div><div class='watu-question' id='question-53'><div class='question-content'><p><span class='watu_num'>53. <\/span>Which one of the following statements correctly identifies risks in foreign exchange forwards?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116931' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481912' \/><div class='watu-question-choice'><input type='radio' name='answer-116931[]' id='answer-id-481912' class='answer answer-53  answerof-116931' value='481912' \/>&nbsp;<label for='answer-id-481912' id='answer-label-481912' class=' answer label-53'><span class='answer'>Short-term forward price fluctuations are driven by changes in the spot exchange rate, since most inter-country interest rates differentials are significant, and the effect of compounding is large for short periods of time.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481913' \/><div class='watu-question-choice'><input type='radio' name='answer-116931[]' id='answer-id-481913' class='answer answer-53  answerof-116931' value='481913' \/>&nbsp;<label for='answer-id-481913' id='answer-label-481913' class=' answer label-53'><span class='answer'>Short-term forward price fluctuations are driven by changes in the spot exchange rate, since most inter-country interest rates differentials are small, and the effect of compounding is small for short periods of time.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481914' \/><div class='watu-question-choice'><input type='radio' name='answer-116931[]' id='answer-id-481914' class='answer answer-53  answerof-116931' value='481914' \/>&nbsp;<label for='answer-id-481914' id='answer-label-481914' class=' answer label-53'><span class='answer'>Long-term forward price fluctuations are driven by changes in the spot exchange rate, since most inter-country interest rates differentials are small, and the effect of compounding is large for short periods of time.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481915' \/><div class='watu-question-choice'><input type='radio' name='answer-116931[]' id='answer-id-481915' class='answer answer-53  answerof-116931' value='481915' \/>&nbsp;<label for='answer-id-481915' id='answer-label-481915' class=' answer label-53'><span class='answer'>Long-term forward price fluctuations are driven by changes in the spot exchange rate, since most inter-country interest rates differentials are significant, and the effect of compounding is small for short periods of time.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType53' value='radio' class=''><\/div><div class='watu-question' id='question-54'><div class='question-content'><p><span class='watu_num'>54. <\/span>Which one of the four following statements regarding foreign exchange (FX) swap transactions is INCORRECT?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116932' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481916' \/><div class='watu-question-choice'><input type='radio' name='answer-116932[]' id='answer-id-481916' class='answer answer-54  answerof-116932' value='481916' \/>&nbsp;<label for='answer-id-481916' id='answer-label-481916' class=' answer label-54'><span class='answer'>FX swap is a common short-term transaction.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481917' \/><div class='watu-question-choice'><input type='radio' name='answer-116932[]' id='answer-id-481917' class='answer answer-54  answerof-116932' value='481917' \/>&nbsp;<label for='answer-id-481917' id='answer-label-481917' class=' answer label-54'><span class='answer'>FX swap is normally used for hedging various currency positions.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481918' \/><div class='watu-question-choice'><input type='radio' name='answer-116932[]' id='answer-id-481918' class='answer answer-54  answerof-116932' value='481918' \/>&nbsp;<label for='answer-id-481918' id='answer-label-481918' class=' answer label-54'><span class='answer'>FX swap generates more exchange rate risk than simple forward transactions.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481919' \/><div class='watu-question-choice'><input type='radio' name='answer-116932[]' id='answer-id-481919' class='answer answer-54  answerof-116932' value='481919' \/>&nbsp;<label for='answer-id-481919' id='answer-label-481919' class=' answer label-54'><span class='answer'>FX swap is generally used to for funding foreign currency balances and currency speculation.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType54' value='radio' class=''><\/div><div class='watu-question' id='question-55'><div class='question-content'><p><span class='watu_num'>55. <\/span>To hedge a foreign exchange exposure on behalf of a client, a small regional bank seeks to enter into an offsetting foreign exchange transaction. It cannot access the large and liquid interbank market open primarily to larger banks.<br \/>\n<br \/>At which one of the following exchanges can the smaller bank trade the currency futures contracts?<br \/>\n<br \/>I. The Tokyo Futures Exchange<br \/>\n<br \/>II. The Euronext-Liffe Exchange<br \/>\n<br \/>III. The Chicago Mercantile Exchange<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116933' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481920' \/><div class='watu-question-choice'><input type='radio' name='answer-116933[]' id='answer-id-481920' class='answer answer-55  answerof-116933' value='481920' \/>&nbsp;<label for='answer-id-481920' id='answer-label-481920' class=' answer label-55'><span class='answer'>I<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481921' \/><div class='watu-question-choice'><input type='radio' name='answer-116933[]' id='answer-id-481921' class='answer answer-55  answerof-116933' value='481921' \/>&nbsp;<label for='answer-id-481921' id='answer-label-481921' class=' answer label-55'><span class='answer'>III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481922' \/><div class='watu-question-choice'><input type='radio' name='answer-116933[]' id='answer-id-481922' class='answer answer-55  answerof-116933' value='481922' \/>&nbsp;<label for='answer-id-481922' id='answer-label-481922' class=' answer label-55'><span class='answer'>II, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481923' \/><div class='watu-question-choice'><input type='radio' name='answer-116933[]' id='answer-id-481923' class='answer answer-55  answerof-116933' value='481923' \/>&nbsp;<label for='answer-id-481923' id='answer-label-481923' class=' answer label-55'><span class='answer'>I, II, III<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType55' value='radio' class=''><\/div><div class='watu-question' id='question-56'><div class='question-content'><p><span class='watu_num'>56. <\/span>Which one of the following four features is NOT a typical characteristic of futures contracts?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116934' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481924' \/><div class='watu-question-choice'><input type='radio' name='answer-116934[]' id='answer-id-481924' class='answer answer-56  answerof-116934' value='481924' \/>&nbsp;<label for='answer-id-481924' id='answer-label-481924' class=' answer label-56'><span class='answer'>Fixed notional amount per contract<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481925' \/><div class='watu-question-choice'><input type='radio' name='answer-116934[]' id='answer-id-481925' class='answer answer-56  answerof-116934' value='481925' \/>&nbsp;<label for='answer-id-481925' id='answer-label-481925' class=' answer label-56'><span class='answer'>Fixed dates for delivery<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481926' \/><div class='watu-question-choice'><input type='radio' name='answer-116934[]' id='answer-id-481926' class='answer answer-56  answerof-116934' value='481926' \/>&nbsp;<label for='answer-id-481926' id='answer-label-481926' class=' answer label-56'><span class='answer'>Traded Over-the-counter only<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481927' \/><div class='watu-question-choice'><input type='radio' name='answer-116934[]' id='answer-id-481927' class='answer answer-56  answerof-116934' value='481927' \/>&nbsp;<label for='answer-id-481927' id='answer-label-481927' class=' answer label-56'><span class='answer'>Daily margin calls<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType56' value='radio' class=''><\/div><div class='watu-question' id='question-57'><div class='question-content'><p><span class='watu_num'>57. <\/span>Which one of the following statements about futures contracts is correct?<br \/>\n<br \/>I. Futures contracts are subject to the same risks as the underlying instruments.<br \/>\n<br \/>II. Futures contracts have additional interest rate risk die to the future delivery date.<br \/>\n<br \/>III. Futures contracts traded in a clearinghouse system are exposed to credit risk with numerous counterparties.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116935' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481928' \/><div class='watu-question-choice'><input type='radio' name='answer-116935[]' id='answer-id-481928' class='answer answer-57  answerof-116935' value='481928' \/>&nbsp;<label for='answer-id-481928' id='answer-label-481928' class=' answer label-57'><span class='answer'>I<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481929' \/><div class='watu-question-choice'><input type='radio' name='answer-116935[]' id='answer-id-481929' class='answer answer-57  answerof-116935' value='481929' \/>&nbsp;<label for='answer-id-481929' id='answer-label-481929' class=' answer label-57'><span class='answer'>I, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481930' \/><div class='watu-question-choice'><input type='radio' name='answer-116935[]' id='answer-id-481930' class='answer answer-57  answerof-116935' value='481930' \/>&nbsp;<label for='answer-id-481930' id='answer-label-481930' class=' answer label-57'><span class='answer'>II, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481931' \/><div class='watu-question-choice'><input type='radio' name='answer-116935[]' id='answer-id-481931' class='answer answer-57  answerof-116935' value='481931' \/>&nbsp;<label for='answer-id-481931' id='answer-label-481931' class=' answer label-57'><span class='answer'>I, II, III<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType57' value='radio' class=''><\/div><div class='watu-question' id='question-58'><div class='question-content'><p><span class='watu_num'>58. <\/span>Which one of the following four options is NOT a typical component of a currency swap?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116936' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481932' \/><div class='watu-question-choice'><input type='radio' name='answer-116936[]' id='answer-id-481932' class='answer answer-58  answerof-116936' value='481932' \/>&nbsp;<label for='answer-id-481932' id='answer-label-481932' class=' answer label-58'><span class='answer'>An initial currency exchange of the notional amount<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481933' \/><div class='watu-question-choice'><input type='radio' name='answer-116936[]' id='answer-id-481933' class='answer answer-58  answerof-116936' value='481933' \/>&nbsp;<label for='answer-id-481933' id='answer-label-481933' class=' answer label-58'><span class='answer'>Denomination of the original notional amount into a foreign currency<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481934' \/><div class='watu-question-choice'><input type='radio' name='answer-116936[]' id='answer-id-481934' class='answer answer-58  answerof-116936' value='481934' \/>&nbsp;<label for='answer-id-481934' id='answer-label-481934' class=' answer label-58'><span class='answer'>Periodic exchange of interest payments in different currencies<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481935' \/><div class='watu-question-choice'><input type='radio' name='answer-116936[]' id='answer-id-481935' class='answer answer-58  answerof-116936' value='481935' \/>&nbsp;<label for='answer-id-481935' id='answer-label-481935' class=' answer label-58'><span class='answer'>A final currency exchange<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType58' value='radio' class=''><\/div><div class='watu-question' id='question-59'><div class='question-content'><p><span class='watu_num'>59. <\/span>An options trader is assessing the aggregate risk of her currency options exposures. As an options buyer, she can potentially ___ lose more than the premium originally paid. As an option seller, however, she has a ___ risk on the contract and always receives a premium.<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116937' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481936' \/><div class='watu-question-choice'><input type='radio' name='answer-116937[]' id='answer-id-481936' class='answer answer-59  answerof-116937' value='481936' \/>&nbsp;<label for='answer-id-481936' id='answer-label-481936' class=' answer label-59'><span class='answer'>Never, unlimited<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481937' \/><div class='watu-question-choice'><input type='radio' name='answer-116937[]' id='answer-id-481937' class='answer answer-59  answerof-116937' value='481937' \/>&nbsp;<label for='answer-id-481937' id='answer-label-481937' class=' answer label-59'><span class='answer'>Sometimes, unlimited<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481938' \/><div class='watu-question-choice'><input type='radio' name='answer-116937[]' id='answer-id-481938' class='answer answer-59  answerof-116937' value='481938' \/>&nbsp;<label for='answer-id-481938' id='answer-label-481938' class=' answer label-59'><span class='answer'>Never, limited<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481939' \/><div class='watu-question-choice'><input type='radio' name='answer-116937[]' id='answer-id-481939' class='answer answer-59  answerof-116937' value='481939' \/>&nbsp;<label for='answer-id-481939' id='answer-label-481939' class=' answer label-59'><span class='answer'>Sometimes, limited<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType59' value='radio' class=''><\/div><div class='watu-question' id='question-60'><div class='question-content'><p><span class='watu_num'>60. <\/span>Which one of the following four statements correctly defines a non-exotic call option?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116938' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481940' \/><div class='watu-question-choice'><input type='radio' name='answer-116938[]' id='answer-id-481940' class='answer answer-60  answerof-116938' value='481940' \/>&nbsp;<label for='answer-id-481940' id='answer-label-481940' class=' answer label-60'><span class='answer'>A call option gives the call option buyer the obligation, but not the right, to buy the underlying instrument at a known price in the future.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481941' \/><div class='watu-question-choice'><input type='radio' name='answer-116938[]' id='answer-id-481941' class='answer answer-60  answerof-116938' value='481941' \/>&nbsp;<label for='answer-id-481941' id='answer-label-481941' class=' answer label-60'><span class='answer'>A call option gives the call option buyer the obligation, but not the right, to sell the underlying instrument at a known price in the future<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481942' \/><div class='watu-question-choice'><input type='radio' name='answer-116938[]' id='answer-id-481942' class='answer answer-60  answerof-116938' value='481942' \/>&nbsp;<label for='answer-id-481942' id='answer-label-481942' class=' answer label-60'><span class='answer'>A call option gives the call option buyer the right, but not the obligation, to buy the underlying instrument at a known price in the future<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481943' \/><div class='watu-question-choice'><input type='radio' name='answer-116938[]' id='answer-id-481943' class='answer answer-60  answerof-116938' value='481943' \/>&nbsp;<label for='answer-id-481943' id='answer-label-481943' class=' answer label-60'><span class='answer'>A call option gives the call option buyer the right, but not the obligation, to sell the underlying instrument at a known price in the future<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType60' value='radio' class=''><\/div><div class='watu-question' id='question-61'><div class='question-content'><p><span class='watu_num'>61. <\/span>Which one of the following four statements correctly describes an American call option?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116939' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481944' \/><div class='watu-question-choice'><input type='radio' name='answer-116939[]' id='answer-id-481944' class='answer answer-61  answerof-116939' value='481944' \/>&nbsp;<label for='answer-id-481944' id='answer-label-481944' class=' answer label-61'><span class='answer'>An American call option gives the buyer of that call option the right to buy the underlying instrument on any date up to and including the expiry date.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481945' \/><div class='watu-question-choice'><input type='radio' name='answer-116939[]' id='answer-id-481945' class='answer answer-61  answerof-116939' value='481945' \/>&nbsp;<label for='answer-id-481945' id='answer-label-481945' class=' answer label-61'><span class='answer'>An American call option gives the buyer of that call option the right to sell the underlying instrument on any date up to and including the expiry date.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481946' \/><div class='watu-question-choice'><input type='radio' name='answer-116939[]' id='answer-id-481946' class='answer answer-61  answerof-116939' value='481946' \/>&nbsp;<label for='answer-id-481946' id='answer-label-481946' class=' answer label-61'><span class='answer'>An American call option gives the buyer of that call option the right to buy the underlying instrument on the expiry date.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481947' \/><div class='watu-question-choice'><input type='radio' name='answer-116939[]' id='answer-id-481947' class='answer answer-61  answerof-116939' value='481947' \/>&nbsp;<label for='answer-id-481947' id='answer-label-481947' class=' answer label-61'><span class='answer'>An American call option gives the buyer of that call option the right to sell the underlying instrument on the expiry date.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType61' value='radio' class=''><\/div><div class='watu-question' id='question-62'><div class='question-content'><p><span class='watu_num'>62. <\/span>According to the largest global poll of foreign exchange market participants, which one of the following four global financial institutions was the most active participant in the global foreign exchange market?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116940' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481948' \/><div class='watu-question-choice'><input type='radio' name='answer-116940[]' id='answer-id-481948' class='answer answer-62  answerof-116940' value='481948' \/>&nbsp;<label for='answer-id-481948' id='answer-label-481948' class=' answer label-62'><span class='answer'>Citibank<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481949' \/><div class='watu-question-choice'><input type='radio' name='answer-116940[]' id='answer-id-481949' class='answer answer-62  answerof-116940' value='481949' \/>&nbsp;<label for='answer-id-481949' id='answer-label-481949' class=' answer label-62'><span class='answer'>UBS AG<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481950' \/><div class='watu-question-choice'><input type='radio' name='answer-116940[]' id='answer-id-481950' class='answer answer-62  answerof-116940' value='481950' \/>&nbsp;<label for='answer-id-481950' id='answer-label-481950' class=' answer label-62'><span class='answer'>Deutsche Bank<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481951' \/><div class='watu-question-choice'><input type='radio' name='answer-116940[]' id='answer-id-481951' class='answer answer-62  answerof-116940' value='481951' \/>&nbsp;<label for='answer-id-481951' id='answer-label-481951' class=' answer label-62'><span class='answer'>Barclays Capital<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType62' value='radio' class=''><\/div><div class='watu-question' id='question-63'><div class='question-content'><p><span class='watu_num'>63. <\/span>In analyzing market option pricing dynamics, a risk manager evaluates option value changes throughout the entire trading day.<br \/>\n<br \/>Which of the following factors would most likely affect foreign exchange option values?<br \/>\n<br \/>I. Change in the value of the underlying<br \/>\n<br \/>II. Change in the perception of future volatility<br \/>\n<br \/>III. Change in interest rates<br \/>\n<br \/>IV. Passage of time<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116941' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481952' \/><div class='watu-question-choice'><input type='radio' name='answer-116941[]' id='answer-id-481952' class='answer answer-63  answerof-116941' value='481952' \/>&nbsp;<label for='answer-id-481952' id='answer-label-481952' class=' answer label-63'><span class='answer'>I, II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481953' \/><div class='watu-question-choice'><input type='radio' name='answer-116941[]' id='answer-id-481953' class='answer answer-63  answerof-116941' value='481953' \/>&nbsp;<label for='answer-id-481953' id='answer-label-481953' class=' answer label-63'><span class='answer'>I, II, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481954' \/><div class='watu-question-choice'><input type='radio' name='answer-116941[]' id='answer-id-481954' class='answer answer-63  answerof-116941' value='481954' \/>&nbsp;<label for='answer-id-481954' id='answer-label-481954' class=' answer label-63'><span class='answer'>II, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481955' \/><div class='watu-question-choice'><input type='radio' name='answer-116941[]' id='answer-id-481955' class='answer answer-63  answerof-116941' value='481955' \/>&nbsp;<label for='answer-id-481955' id='answer-label-481955' class=' answer label-63'><span class='answer'>I, II, III, IV<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType63' value='radio' class=''><\/div><div class='watu-question' id='question-64'><div class='question-content'><p><span class='watu_num'>64. <\/span>Which one of the following four statements about the relationship between exchange rates and option values is correct?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116942' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481956' \/><div class='watu-question-choice'><input type='radio' name='answer-116942[]' id='answer-id-481956' class='answer answer-64  answerof-116942' value='481956' \/>&nbsp;<label for='answer-id-481956' id='answer-label-481956' class=' answer label-64'><span class='answer'>As the dollar appreciates relative to the pound, the right to buy dollars at a fixed pound exchange rate decreases.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481957' \/><div class='watu-question-choice'><input type='radio' name='answer-116942[]' id='answer-id-481957' class='answer answer-64  answerof-116942' value='481957' \/>&nbsp;<label for='answer-id-481957' id='answer-label-481957' class=' answer label-64'><span class='answer'>As the dollar appreciates relative to the pound, the right to buy dollars at a fixed pound exchange rate increases.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481958' \/><div class='watu-question-choice'><input type='radio' name='answer-116942[]' id='answer-id-481958' class='answer answer-64  answerof-116942' value='481958' \/>&nbsp;<label for='answer-id-481958' id='answer-label-481958' class=' answer label-64'><span class='answer'>As the dollar depreciates relative to the pound, the right to buy dollars at a fixed pound exchange rate increases.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481959' \/><div class='watu-question-choice'><input type='radio' name='answer-116942[]' id='answer-id-481959' class='answer answer-64  answerof-116942' value='481959' \/>&nbsp;<label for='answer-id-481959' id='answer-label-481959' class=' answer label-64'><span class='answer'>As the dollar appreciates relative to the pound, the right to sell dollars at a fixed pound exchange rate increases.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType64' value='radio' class=''><\/div><div class='watu-question' id='question-65'><div class='question-content'><p><span class='watu_num'>65. <\/span>Which one of the following four statements does identify correctly the relationship between the value of an option and perceived exchange rate volatility?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116943' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481960' \/><div class='watu-question-choice'><input type='radio' name='answer-116943[]' id='answer-id-481960' class='answer answer-65  answerof-116943' value='481960' \/>&nbsp;<label for='answer-id-481960' id='answer-label-481960' class=' answer label-65'><span class='answer'>With increases in perceived future foreign exchange volatility, the value of all foreign exchange<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481961' \/><div class='watu-question-choice'><input type='radio' name='answer-116943[]' id='answer-id-481961' class='answer answer-65  answerof-116943' value='481961' \/>&nbsp;<label for='answer-id-481961' id='answer-label-481961' class=' answer label-65'><span class='answer'>As the perceived future foreign exchange volatility decreases, the value of all options increases.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481962' \/><div class='watu-question-choice'><input type='radio' name='answer-116943[]' id='answer-id-481962' class='answer answer-65  answerof-116943' value='481962' \/>&nbsp;<label for='answer-id-481962' id='answer-label-481962' class=' answer label-65'><span class='answer'>As the perceived future foreign exchange volatility increases, the value of all options increases.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481963' \/><div class='watu-question-choice'><input type='radio' name='answer-116943[]' id='answer-id-481963' class='answer answer-65  answerof-116943' value='481963' \/>&nbsp;<label for='answer-id-481963' id='answer-label-481963' class=' answer label-65'><span class='answer'>Option values can only change due to the factors related to the demand for specific options<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType65' value='radio' class=''><\/div><div class='watu-question' id='question-66'><div class='question-content'><p><span class='watu_num'>66. <\/span>Which one of the following four mathematical option pricing models is used most widely for pricing European options?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116944' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481964' \/><div class='watu-question-choice'><input type='radio' name='answer-116944[]' id='answer-id-481964' class='answer answer-66  answerof-116944' value='481964' \/>&nbsp;<label for='answer-id-481964' id='answer-label-481964' class=' answer label-66'><span class='answer'>The Black model<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481965' \/><div class='watu-question-choice'><input type='radio' name='answer-116944[]' id='answer-id-481965' class='answer answer-66  answerof-116944' value='481965' \/>&nbsp;<label for='answer-id-481965' id='answer-label-481965' class=' answer label-66'><span class='answer'>The Black-Scholes model<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481966' \/><div class='watu-question-choice'><input type='radio' name='answer-116944[]' id='answer-id-481966' class='answer answer-66  answerof-116944' value='481966' \/>&nbsp;<label for='answer-id-481966' id='answer-label-481966' class=' answer label-66'><span class='answer'>The Garman-Kohlhagen model<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481967' \/><div class='watu-question-choice'><input type='radio' name='answer-116944[]' id='answer-id-481967' class='answer answer-66  answerof-116944' value='481967' \/>&nbsp;<label for='answer-id-481967' id='answer-label-481967' class=' answer label-66'><span class='answer'>The Heston model<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType66' value='radio' class=''><\/div><div class='watu-question' id='question-67'><div class='question-content'><p><span class='watu_num'>67. <\/span>A risk manager is considering how to best quantify option price dynamics using mathematical option pricing models.<br \/>\n<br \/>Which of the following variables would most likely serve as an input in these models?<br \/>\n<br \/>I. Implicit parameter estimate based on observed market prices<br \/>\n<br \/>II. Estimates of sensitivity of option prices to parameter changes<br \/>\n<br \/>III. Theoretical option determination based on assumptions<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116945' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481968' \/><div class='watu-question-choice'><input type='radio' name='answer-116945[]' id='answer-id-481968' class='answer answer-67  answerof-116945' value='481968' \/>&nbsp;<label for='answer-id-481968' id='answer-label-481968' class=' answer label-67'><span class='answer'>I, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481969' \/><div class='watu-question-choice'><input type='radio' name='answer-116945[]' id='answer-id-481969' class='answer answer-67  answerof-116945' value='481969' \/>&nbsp;<label for='answer-id-481969' id='answer-label-481969' class=' answer label-67'><span class='answer'>II<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481970' \/><div class='watu-question-choice'><input type='radio' name='answer-116945[]' id='answer-id-481970' class='answer answer-67  answerof-116945' value='481970' \/>&nbsp;<label for='answer-id-481970' id='answer-label-481970' class=' answer label-67'><span class='answer'>II, III<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481971' \/><div class='watu-question-choice'><input type='radio' name='answer-116945[]' id='answer-id-481971' class='answer answer-67  answerof-116945' value='481971' \/>&nbsp;<label for='answer-id-481971' id='answer-label-481971' class=' answer label-67'><span class='answer'>I, II, III<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType67' value='radio' class=''><\/div><div class='watu-question' id='question-68'><div class='question-content'><p><span class='watu_num'>68. <\/span>Which one of the following four parameters is NOT a required input in the Black-Scholes model to price a foreign exchange option?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116946' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481972' \/><div class='watu-question-choice'><input type='radio' name='answer-116946[]' id='answer-id-481972' class='answer answer-68  answerof-116946' value='481972' \/>&nbsp;<label for='answer-id-481972' id='answer-label-481972' class=' answer label-68'><span class='answer'>Underlying exchange rates<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481973' \/><div class='watu-question-choice'><input type='radio' name='answer-116946[]' id='answer-id-481973' class='answer answer-68  answerof-116946' value='481973' \/>&nbsp;<label for='answer-id-481973' id='answer-label-481973' class=' answer label-68'><span class='answer'>Underlying interest rates<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481974' \/><div class='watu-question-choice'><input type='radio' name='answer-116946[]' id='answer-id-481974' class='answer answer-68  answerof-116946' value='481974' \/>&nbsp;<label for='answer-id-481974' id='answer-label-481974' class=' answer label-68'><span class='answer'>Discrete future stock prices<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481975' \/><div class='watu-question-choice'><input type='radio' name='answer-116946[]' id='answer-id-481975' class='answer answer-68  answerof-116946' value='481975' \/>&nbsp;<label for='answer-id-481975' id='answer-label-481975' class=' answer label-68'><span class='answer'>Option exercise price<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType68' value='radio' class=''><\/div><div class='watu-question' id='question-69'><div class='question-content'><p><span class='watu_num'>69. <\/span>Which one of the following four variables of the Black-Scholes model is typically NOT known at a point in time?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116947' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481976' \/><div class='watu-question-choice'><input type='radio' name='answer-116947[]' id='answer-id-481976' class='answer answer-69  answerof-116947' value='481976' \/>&nbsp;<label for='answer-id-481976' id='answer-label-481976' class=' answer label-69'><span class='answer'>The underlying relevant exchange rates<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481977' \/><div class='watu-question-choice'><input type='radio' name='answer-116947[]' id='answer-id-481977' class='answer answer-69  answerof-116947' value='481977' \/>&nbsp;<label for='answer-id-481977' id='answer-label-481977' class=' answer label-69'><span class='answer'>The underlying interest rates<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481978' \/><div class='watu-question-choice'><input type='radio' name='answer-116947[]' id='answer-id-481978' class='answer answer-69  answerof-116947' value='481978' \/>&nbsp;<label for='answer-id-481978' id='answer-label-481978' class=' answer label-69'><span class='answer'>The future volatility of the exchange rates<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481979' \/><div class='watu-question-choice'><input type='radio' name='answer-116947[]' id='answer-id-481979' class='answer answer-69  answerof-116947' value='481979' \/>&nbsp;<label for='answer-id-481979' id='answer-label-481979' class=' answer label-69'><span class='answer'>The time to maturity<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType69' value='radio' class=''><\/div><div class='watu-question' id='question-70'><div class='question-content'><p><span class='watu_num'>70. <\/span>A risk manager analyzes a long position with a USD 10 million value. To hedge the portfolio, it seeks to use options that decrease JPY 0.50 in value for every JPY 1 increase in the long position.<br \/>\n<br \/>At first approximation, what is the overall exposure to USD depreciation?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116948' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481980' \/><div class='watu-question-choice'><input type='radio' name='answer-116948[]' id='answer-id-481980' class='answer answer-70  answerof-116948' value='481980' \/>&nbsp;<label for='answer-id-481980' id='answer-label-481980' class=' answer label-70'><span class='answer'>His overall portfolio has the same exposure to USD as a portfolio that is long USD 5 million.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481981' \/><div class='watu-question-choice'><input type='radio' name='answer-116948[]' id='answer-id-481981' class='answer answer-70  answerof-116948' value='481981' \/>&nbsp;<label for='answer-id-481981' id='answer-label-481981' class=' answer label-70'><span class='answer'>His overall portfolio has the same exposure to USD as a portfolio that is long USD 10 million.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481982' \/><div class='watu-question-choice'><input type='radio' name='answer-116948[]' id='answer-id-481982' class='answer answer-70  answerof-116948' value='481982' \/>&nbsp;<label for='answer-id-481982' id='answer-label-481982' class=' answer label-70'><span class='answer'>His overall portfolio has the same exposure to USD as a portfolio that is short USD 5 million.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481983' \/><div class='watu-question-choice'><input type='radio' name='answer-116948[]' id='answer-id-481983' class='answer answer-70  answerof-116948' value='481983' \/>&nbsp;<label for='answer-id-481983' id='answer-label-481983' class=' answer label-70'><span class='answer'>His overall portfolio has the same exposure to USD as a portfolio that is short USD 10 million.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType70' value='radio' class=''><\/div><div class='watu-question' id='question-71'><div class='question-content'><p><span class='watu_num'>71. <\/span>A risk manager has a long forward position of USD 1 million but the option portfolio decreases JPY 0.50 for every JPY 1 increase in his forward position.<br \/>\n<br \/>At first approximation, what is the overall result of the options positions?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116949' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481984' \/><div class='watu-question-choice'><input type='radio' name='answer-116949[]' id='answer-id-481984' class='answer answer-71  answerof-116949' value='481984' \/>&nbsp;<label for='answer-id-481984' id='answer-label-481984' class=' answer label-71'><span class='answer'>The options positions hedge the forward position by 25%.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481985' \/><div class='watu-question-choice'><input type='radio' name='answer-116949[]' id='answer-id-481985' class='answer answer-71  answerof-116949' value='481985' \/>&nbsp;<label for='answer-id-481985' id='answer-label-481985' class=' answer label-71'><span class='answer'>The option positions hedge the forward position by 50%.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481986' \/><div class='watu-question-choice'><input type='radio' name='answer-116949[]' id='answer-id-481986' class='answer answer-71  answerof-116949' value='481986' \/>&nbsp;<label for='answer-id-481986' id='answer-label-481986' class=' answer label-71'><span class='answer'>The option positions hedge the forward position by 75%.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481987' \/><div class='watu-question-choice'><input type='radio' name='answer-116949[]' id='answer-id-481987' class='answer answer-71  answerof-116949' value='481987' \/>&nbsp;<label for='answer-id-481987' id='answer-label-481987' class=' answer label-71'><span class='answer'>The option positions hedge the forward position by 100%.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType71' value='radio' class=''><\/div><div class='watu-question' id='question-72'><div class='question-content'><p><span class='watu_num'>72. <\/span>Which one of the following four statements correctly defines an option&#8217;s delta?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116950' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481988' \/><div class='watu-question-choice'><input type='radio' name='answer-116950[]' id='answer-id-481988' class='answer answer-72  answerof-116950' value='481988' \/>&nbsp;<label for='answer-id-481988' id='answer-label-481988' class=' answer label-72'><span class='answer'>Delta measures the expected decline in option with time and is usually expressed in years.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481989' \/><div class='watu-question-choice'><input type='radio' name='answer-116950[]' id='answer-id-481989' class='answer answer-72  answerof-116950' value='481989' \/>&nbsp;<label for='answer-id-481989' id='answer-label-481989' class=' answer label-72'><span class='answer'>Delta measures the effect of 1 bp in interest rate change on the option price.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481990' \/><div class='watu-question-choice'><input type='radio' name='answer-116950[]' id='answer-id-481990' class='answer answer-72  answerof-116950' value='481990' \/>&nbsp;<label for='answer-id-481990' id='answer-label-481990' class=' answer label-72'><span class='answer'>Delta is the multiplier that best approximates the short-term change in the value of an option.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481991' \/><div class='watu-question-choice'><input type='radio' name='answer-116950[]' id='answer-id-481991' class='answer answer-72  answerof-116950' value='481991' \/>&nbsp;<label for='answer-id-481991' id='answer-label-481991' class=' answer label-72'><span class='answer'>Delta measures the impact of volatility on the price of an option.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType72' value='radio' class=''><\/div><div class='watu-question' id='question-73'><div class='question-content'><p><span class='watu_num'>73. <\/span>In the United States, during the second quarter of 2009, transactions in foreign exchange derivative contracts comprised approximately what proportion of all types of derivative transactions between financial institutions?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116951' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481992' \/><div class='watu-question-choice'><input type='radio' name='answer-116951[]' id='answer-id-481992' class='answer answer-73  answerof-116951' value='481992' \/>&nbsp;<label for='answer-id-481992' id='answer-label-481992' class=' answer label-73'><span class='answer'>2%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481993' \/><div class='watu-question-choice'><input type='radio' name='answer-116951[]' id='answer-id-481993' class='answer answer-73  answerof-116951' value='481993' \/>&nbsp;<label for='answer-id-481993' id='answer-label-481993' class=' answer label-73'><span class='answer'>7%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481994' \/><div class='watu-question-choice'><input type='radio' name='answer-116951[]' id='answer-id-481994' class='answer answer-73  answerof-116951' value='481994' \/>&nbsp;<label for='answer-id-481994' id='answer-label-481994' class=' answer label-73'><span class='answer'>25%<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481995' \/><div class='watu-question-choice'><input type='radio' name='answer-116951[]' id='answer-id-481995' class='answer answer-73  answerof-116951' value='481995' \/>&nbsp;<label for='answer-id-481995' id='answer-label-481995' class=' answer label-73'><span class='answer'>43%<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType73' value='radio' class=''><\/div><div class='watu-question' id='question-74'><div class='question-content'><p><span class='watu_num'>74. <\/span>Which of the following statements about the interest rates and option prices is correct?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116952' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481996' \/><div class='watu-question-choice'><input type='radio' name='answer-116952[]' id='answer-id-481996' class='answer answer-74  answerof-116952' value='481996' \/>&nbsp;<label for='answer-id-481996' id='answer-label-481996' class=' answer label-74'><span class='answer'>If rho is positive, rising interest rates increase option prices.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481997' \/><div class='watu-question-choice'><input type='radio' name='answer-116952[]' id='answer-id-481997' class='answer answer-74  answerof-116952' value='481997' \/>&nbsp;<label for='answer-id-481997' id='answer-label-481997' class=' answer label-74'><span class='answer'>If rho is positive, rising interest rates decrease option prices.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481998' \/><div class='watu-question-choice'><input type='radio' name='answer-116952[]' id='answer-id-481998' class='answer answer-74  answerof-116952' value='481998' \/>&nbsp;<label for='answer-id-481998' id='answer-label-481998' class=' answer label-74'><span class='answer'>As interest rates rise, all options will rise in value.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='481999' \/><div class='watu-question-choice'><input type='radio' name='answer-116952[]' id='answer-id-481999' class='answer answer-74  answerof-116952' value='481999' \/>&nbsp;<label for='answer-id-481999' id='answer-label-481999' class=' answer label-74'><span class='answer'>As interest rates fall, all options will rise in value.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType74' value='radio' class=''><\/div><div class='watu-question' id='question-75'><div class='question-content'><p><span class='watu_num'>75. <\/span>To estimate a partial change in option price, a risk manager will use the following formula:<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116953' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482000' \/><div class='watu-question-choice'><input type='radio' name='answer-116953[]' id='answer-id-482000' class='answer answer-75  answerof-116953' value='482000' \/>&nbsp;<label for='answer-id-482000' id='answer-label-482000' class=' answer label-75'><span class='answer'>Partial change in option price = Delta x Change in underlying price<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482001' \/><div class='watu-question-choice'><input type='radio' name='answer-116953[]' id='answer-id-482001' class='answer answer-75  answerof-116953' value='482001' \/>&nbsp;<label for='answer-id-482001' id='answer-label-482001' class=' answer label-75'><span class='answer'>Partial change in option price = Delta x (1+ Change in underlying price)<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482002' \/><div class='watu-question-choice'><input type='radio' name='answer-116953[]' id='answer-id-482002' class='answer answer-75  answerof-116953' value='482002' \/>&nbsp;<label for='answer-id-482002' id='answer-label-482002' class=' answer label-75'><span class='answer'>Partial change in option price = Delta x Gamma x Change in underlying price<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482003' \/><div class='watu-question-choice'><input type='radio' name='answer-116953[]' id='answer-id-482003' class='answer answer-75  answerof-116953' value='482003' \/>&nbsp;<label for='answer-id-482003' id='answer-label-482003' class=' answer label-75'><span class='answer'>Partial change in option price = Delta x Gamma x (1+ Change in underlying price)<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType75' value='radio' class=''><\/div><div class='watu-question' id='question-76'><div class='question-content'><p><span class='watu_num'>76. <\/span>Which one of the following four statements on factors affecting the value of options is correct?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116954' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482004' \/><div class='watu-question-choice'><input type='radio' name='answer-116954[]' id='answer-id-482004' class='answer answer-76  answerof-116954' value='482004' \/>&nbsp;<label for='answer-id-482004' id='answer-label-482004' class=' answer label-76'><span class='answer'>As volatility rises, options increase in value.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482005' \/><div class='watu-question-choice'><input type='radio' name='answer-116954[]' id='answer-id-482005' class='answer answer-76  answerof-116954' value='482005' \/>&nbsp;<label for='answer-id-482005' id='answer-label-482005' class=' answer label-76'><span class='answer'>As time passes, options will increase in value.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482006' \/><div class='watu-question-choice'><input type='radio' name='answer-116954[]' id='answer-id-482006' class='answer answer-76  answerof-116954' value='482006' \/>&nbsp;<label for='answer-id-482006' id='answer-label-482006' class=' answer label-76'><span class='answer'>As interest rates rise and option&#8217;s rho is positive, option prices will decrease.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482007' \/><div class='watu-question-choice'><input type='radio' name='answer-116954[]' id='answer-id-482007' class='answer answer-76  answerof-116954' value='482007' \/>&nbsp;<label for='answer-id-482007' id='answer-label-482007' class=' answer label-76'><span class='answer'>As the value of underlying security increases, the value of the put option increases.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType76' value='radio' class=''><\/div><div class='watu-question' id='question-77'><div class='question-content'><p><span class='watu_num'>77. <\/span>A risk manager is analyzing a call option on the GBP with a vega of 0.02.<br \/>\n<br \/>When the perceived future volatility increases by 1%, the call option<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116955' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482008' \/><div class='watu-question-choice'><input type='radio' name='answer-116955[]' id='answer-id-482008' class='answer answer-77  answerof-116955' value='482008' \/>&nbsp;<label for='answer-id-482008' id='answer-label-482008' class=' answer label-77'><span class='answer'>Increases in value by 0.02.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482009' \/><div class='watu-question-choice'><input type='radio' name='answer-116955[]' id='answer-id-482009' class='answer answer-77  answerof-116955' value='482009' \/>&nbsp;<label for='answer-id-482009' id='answer-label-482009' class=' answer label-77'><span class='answer'>Increases in value by 2.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482010' \/><div class='watu-question-choice'><input type='radio' name='answer-116955[]' id='answer-id-482010' class='answer answer-77  answerof-116955' value='482010' \/>&nbsp;<label for='answer-id-482010' id='answer-label-482010' class=' answer label-77'><span class='answer'>Decreases in value by 0.02.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482011' \/><div class='watu-question-choice'><input type='radio' name='answer-116955[]' id='answer-id-482011' class='answer answer-77  answerof-116955' value='482011' \/>&nbsp;<label for='answer-id-482011' id='answer-label-482011' class=' answer label-77'><span class='answer'>Decreases in value by 2.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType77' value='radio' class=''><\/div><div class='watu-question' id='question-78'><div class='question-content'><p><span class='watu_num'>78. <\/span>Typically, which one of the following four option risk measures will be used to determine the number of options to use to hedge the underlying position?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116956' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482012' \/><div class='watu-question-choice'><input type='radio' name='answer-116956[]' id='answer-id-482012' class='answer answer-78  answerof-116956' value='482012' \/>&nbsp;<label for='answer-id-482012' id='answer-label-482012' class=' answer label-78'><span class='answer'>Vega<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482013' \/><div class='watu-question-choice'><input type='radio' name='answer-116956[]' id='answer-id-482013' class='answer answer-78  answerof-116956' value='482013' \/>&nbsp;<label for='answer-id-482013' id='answer-label-482013' class=' answer label-78'><span class='answer'>Rho<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482014' \/><div class='watu-question-choice'><input type='radio' name='answer-116956[]' id='answer-id-482014' class='answer answer-78  answerof-116956' value='482014' \/>&nbsp;<label for='answer-id-482014' id='answer-label-482014' class=' answer label-78'><span class='answer'>Delta<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482015' \/><div class='watu-question-choice'><input type='radio' name='answer-116956[]' id='answer-id-482015' class='answer answer-78  answerof-116956' value='482015' \/>&nbsp;<label for='answer-id-482015' id='answer-label-482015' class=' answer label-78'><span class='answer'>Theta<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType78' value='radio' class=''><\/div><div class='watu-question' id='question-79'><div class='question-content'><p><span class='watu_num'>79. <\/span>Which one of the following four statements correctly defines chooser options?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116957' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482016' \/><div class='watu-question-choice'><input type='radio' name='answer-116957[]' id='answer-id-482016' class='answer answer-79  answerof-116957' value='482016' \/>&nbsp;<label for='answer-id-482016' id='answer-label-482016' class=' answer label-79'><span class='answer'>The owner of these options decides if the option is a call or put option only when a predetermined date is reached.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482017' \/><div class='watu-question-choice'><input type='radio' name='answer-116957[]' id='answer-id-482017' class='answer answer-79  answerof-116957' value='482017' \/>&nbsp;<label for='answer-id-482017' id='answer-label-482017' class=' answer label-79'><span class='answer'>These options represent a variation of the plain vanilla option where the underlying asset is a basket of currencies.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482018' \/><div class='watu-question-choice'><input type='radio' name='answer-116957[]' id='answer-id-482018' class='answer answer-79  answerof-116957' value='482018' \/>&nbsp;<label for='answer-id-482018' id='answer-label-482018' class=' answer label-79'><span class='answer'>These options pay an amount equal to the power of the value of the underlying asset above the strike price.<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482019' \/><div class='watu-question-choice'><input type='radio' name='answer-116957[]' id='answer-id-482019' class='answer answer-79  answerof-116957' value='482019' \/>&nbsp;<label for='answer-id-482019' id='answer-label-482019' class=' answer label-79'><span class='answer'>These options give the holder the right to exchange one asset for another.<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType79' value='radio' class=''><\/div><div class='watu-question' id='question-80'><div class='question-content'><p><span class='watu_num'>80. <\/span>Which one of the following four exotic option types has another option as its underlying asset, and as a result of its construction is generally believed to be very difficult to model?<\/p>\n<\/div><input type='hidden' name='question_id[]' value='116958' \/><div class='watu-questions-wrap '><input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482020' \/><div class='watu-question-choice'><input type='radio' name='answer-116958[]' id='answer-id-482020' class='answer answer-80  answerof-116958' value='482020' \/>&nbsp;<label for='answer-id-482020' id='answer-label-482020' class=' answer label-80'><span class='answer'>Spread options<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482021' \/><div class='watu-question-choice'><input type='radio' name='answer-116958[]' id='answer-id-482021' class='answer answer-80  answerof-116958' value='482021' \/>&nbsp;<label for='answer-id-482021' id='answer-label-482021' class=' answer label-80'><span class='answer'>Chooser options<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482022' \/><div class='watu-question-choice'><input type='radio' name='answer-116958[]' id='answer-id-482022' class='answer answer-80  answerof-116958' value='482022' \/>&nbsp;<label for='answer-id-482022' id='answer-label-482022' class=' answer label-80'><span class='answer'>Binary options<\/span><\/label><\/div>\n<input type='hidden' name='answer_ids[]' class='watu-answer-ids' value='482023' \/><div class='watu-question-choice'><input type='radio' name='answer-116958[]' id='answer-id-482023' class='answer answer-80  answerof-116958' value='482023' \/>&nbsp;<label for='answer-id-482023' id='answer-label-482023' class=' answer label-80'><span class='answer'>Compound options<\/span><\/label><\/div>\n<\/div><input type='hidden' id='questionType80' value='radio' class=''><\/div><div style='display:none' id='question-81'><br \/><div class='question-content'><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.dumpsbase.com\/freedumps\/wp-content\/plugins\/watu\/loading.gif\" width=\"16\" 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